SHKP sinks to 14-year low

Sun Hung Kai Properties (0016) fell as much as 12.7 percent after its disappointing earnings before ending at a 14-year low yesterday, dragging down shares of other local developers.

One of the largest real-estate companies in Hong Kong, SHKP disclosed last Thursday that its underlying profit excluding property revaluation gains slumped 17 percent for the year ended June.

It also warned that it will cut the full-year dividend payout ratio to underlying profit to 40 percent from the current 60 percent.

Citi slashed its target price for SHKP by 20 percent to HK$103.3 apiece, with more conservative forecasts on its property sales and gross profit margins.

After Hong Kong's stock market resumed trading yesterday following Friday's closure due to torrential rain the night before, SHKP once dived to HK$77.1 before ending 9.5 percent lower at HK$79.95 and back to levels last seen in 2009. It was also the worst-performing blue chip.

Meanwhile, the Hongkong and Shanghai Banking Corporation's interest rate cap increase for mortgage plans related to the Hong Kong interbank offered rate further fueled the rout.

Henderson Land Development (0012) lost 4 percent while New World Development (0017) slipped 6.1 percent. MTR Corporation (0066) also fell 3.1 percent.

CK Asset (1113) saw a smaller decline of 1.8 percent, followed by Kerry Properties (0683) at 1.5 percent and Swire Properties (1972) at 1.2 percent.