Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Sunday, Dec 03, 2023

Sun Hung Kai Properties issues cautious outlook as profit declines

Sun Hung Kai Properties issues cautious outlook as profit declines

Hong Kong’s biggest developer by market capitalisation reported on Thursday a 3.8 per cent drop in underlying profit for the 12 months ending in June.

Sun Hung Kai Properties (SHKP), Hong Kong’s biggest developer by market capitalisation, issued a cautious outlook amid rising interest rates and pandemic disruptions as it reported a drop in profit for the 12 months ending in June.

Overall demand will be constrained by factors such as rising interest rates despite solid end-user demand and eased mortgage financing introduced in early 2022, Raymond Kwok Ping-luen, SHKP’s chairman and managing director, said in an exchange filing on Thursday.

“Lingering effects and disruptions from the pandemic may continue to cloud leasing markets”, while the company’s property investment business is likely to improve gradually, Kwok said.

Hong Kong’s largest property developer by market capitalisation reported that underlying profit, which excluded the effect of fair value changes on investment properties, fell 3.8 per cent to HK$28.73 billion (US$3.7 billion) year over year.

The Ritz-Carlton Shanghai, Pudong, was significantly impacted by the city’s long lockdown earlier in the year. Sun Hung Kai Properties’ hotel operations recorded a loss of HK$429 million.

The “fluctuating pandemic situation” in Hong Kong and mainland China continued to affect business, the developer said in a separate statement on Thursday, adding it “will speed up the sales of its projects to increase cash flow”.

Since July, the company has recorded sales of over HK$12 billion, the statement said. Launched two months ago, Novo Land in Tuen Mun has sold more than 1,500 units, with proceeds exceeding HK$9.4 billion.

Gross rental income was flat compared with the previous year, at HK$24.8 billion.

“The local economy still faces various challenges in the short term, including restrictions on cross-border travel and the anticipated global economic slowdown,” Kwok added in the exchange filing.

The Centa-City Leading Index, a gauge of lived-in home prices compiled by Centaline Property Agency, fell 0.8 per cent to 173.22 for the week ended August 28, the lowest since March 2019. The index may fall a further 1.9 per cent by the Mid-Autumn Festival on September 10, according to Centaline Property Agency.

SHKP’s hotel operations recorded a loss of HK$429 million, narrower than a loss of HK$511 million the previous year. Stringent travel restrictions and quarantine measures continue to limit the hotel business in both Hong Kong and mainland China, with occupancy averaging 70 per cent.

The Ritz-Carlton Shanghai, Pudong, was “significantly affected by the pandemic, particularly when Shanghai imposed a citywide lockdown in April and May 2022”, the company said, adding that the Andaz Nanjing at Nanjing IFC and Four Seasons Hotel Suzhou have been “rescheduled to open in phases in 2023”.

The world will continue to be affected by supply shocks, elevated inflation, and increased geopolitical risks such as the Russia-Ukraine conflict, Kwok said, adding that most central banks have been tightening monetary policies, which are likely to weigh on the global economy over the near term.

Hong Kong’s homeowners and potential buyers are bracing for higher mortgage rates since the US Federal Reserve embarked on a rapid succession of interest rate hikes in March to tame the fastest inflation in America in four decades.

Raymond Kwok Ping-luen, chairman and managing director of Sun Hung Kai Properties, holds a press conference at the Sun Hung Kai Centre in Wan Chai on September 12, 2019.

The Hong Kong Monetary Authority, the de facto central bank, has increased its base rate in lockstep under its linked exchange rate system with the US dollar.

The Sun Hung Kai Properties board recommended an unchanged final dividend of HK$3.70 per share. Its share price edged up 0.5 per cent to close at HK$94.05 on Thursday.


Related Articles

Hong Kong News
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?