Sun Hung Kai Properties (SHKP) posted a 30 percent rise in full-year net earnings to HK$27.6 billion. The Hong Kong's biggest developer remains optimistic about the property market despite the short-term financial market volatility.

SHKP's full-year results for the year that ended June is in line with market estimates. Its underlying profits, excluding property revaluation gains, edged up 6 percent to HK$12.19 billion. The company proposed a final dividend per share of HK$1.7.

The developer's robust net earnings were boosted by a 43 percent rise in revaluation gains that totaled HK$18.66 billion, and its core earnings growth was driven mainly by the strong growth in rental income that increased by 14 percent to HK$5.99 billion. The rental reversions were strong across all sectors including retail and office.

However, profits from property sales dropped 16 percent to HK$6.44 billion, while sold and pre-sold properties amounted to HK$14.15 billion compared with HK$20.93 billion a year earlier. The key projects included Harbour Place, The Arch, Harbour Green and Severn 8.

"The residential market in Hong Kong remained relatively resilient despite the volatility in financial markets," Kwong Siu-hing, the company's chairperson, said in a statement.

Victor Lui, executive director of SHKP's unit Sun Hung Kai Real Estate Agency, said the coming nine months will be peak period for new project launches. Peak One in Sha Tin will be launched next month. The Cullinan at Kowloon Station and La Grove in Yuen Long are also scheduled to be launched, he said.

In 2008-09 fiscal year, SHKP's property sales target amounted to HK$20 billion, among which, HK$18 billion is from Hong Kong.

The developer admitted that the financial market is volatile in the short run. Vice chairman and managing director Thomas Kwok, however, said: "We are positive about the property market in the long run, as there is balance in residential demand and supply, salary rise and the low mortgage rates."

Kwok said Hong Kong has strong fundamentals and SHKP's outlook on the market will not be swayed by short-term factors. "Once we receive the pre-sale consent (for new residential projects), we will launch the projects. This strategy remains unchanged," Kwok said, "When doing the property business, we must have determined confidence."

SHKP continues seeking chance for adding land bank. However, Kwok criticized the government for setting a too high opening bid for land application. He urged the government to put more diversified plots of land into the application list.

The sluggish mainland property, however, does not deter SHKP's ongoing development. Vice chairman and managing director Raymond Kwok said the company has a long-term target in increasing mainland investment.

On the mainland, SHKP added four new sites in Guangzhou, Suzhou, Nanjing and Chengdu since July 2007 with 12.4 million sq ft of gross floor area.

(HK Edition 09/12/2008 page2)