Full-year underlying net profit to June 30 increases 55% to HK$21.5b

Sun Hung Kai Properties Ltd, the biggest developer by market value in the world, said full-year underlying profit jumped 55 percent to a record high boosted by both strong home sales and rental income in Hong Kong and the mainland.

Net income excluding revaluation gains and deferred tax for the financial year ended June 30, 2011 rose to HK$21.5 billion, from HK$13.9 billion a year earlier, the Hong Kong-based developer told the city's stock exchange on Thursday.

The result compares with the HK$19 billion median estimate surveyed by Bloomberg News and the average HK$18.1 billion forecast by Thomson Reuters.

Profit generated from property sales in Hong Kong and the mainland increased by 152 percent to HK$16.65 billion from HK$6.62 billion a year earlier, the blue-chip giant said.

Net rental income at the developer rose to HK$9.51 billion from HK$8.31 billion a year earlier. Sun Hung Kai owns the city's two tallest buildings - International Finance Centre II on Hong Kong Island and the International Commerce Centre (ICC) in West Kowloon.

New properties including the ICC in Hong Kong as well as Shanghai IFC on the mainland have started posting increased earnings, the developer said, adding that higher rents for new leases have contributed to the robust rental income.

Thomas Kwok, vice chairman of Sun Hung Kai, said the group is launching 3,000 new home units in Hong Kong this year, which is expected to generate HK$28 billion the home sales.

"We will stick to our strategies in land reserves. Once these projects are launched, we will continue to look for land banking opportunities, particularly in Hong Kong," Kwok told a media briefing on Thursday.

Despite rising mortgage rates and concerns about a property bubble in the city, Sun Hung Kai has spent more than HK$11 billion buying sites from the Hong Kong government this year, Bloomberg data shows.

The company also purchased land with a gross floor area of 5.6 million square feet in Hangzhou and Shanghai last year, in a bid to build high-end residential units, a shopping mall, offices as well as a five-star hotel.

"For large-scale developers, current market sentiment is not crucial to them in replenishing land reserves as construction will be completed in three years or even more, and there may be a totally different cycle in the property market by then," Kenny Tang, general manager of AMTD Financial Planning Ltd, told China Daily.

As of June 2011, Sun Hung Kai's land bank amounted to 44.2 million square feet in Hong Kong and 86.1 million square feet on the mainland.

The stock rose HK$1.5 or 1.49 percent to close at HK$102.4 in Hong Kong trading on Thursday.

The company distributed a final dividend of HK$2.40 per share. Together with the interim dividend of HK$0.95 per share, the full-year dividend amounted to HK$3.35 a share, an increase of 24 percent versus HK$2.70 last year.

In a separate statement, Sun Hung Kai said vice chairmen Thomas Kwok and Raymond Kwok have been appointed joint chairmen of the company. They will replace Kwong Siu-hing, the chairwoman who currently controls the company, effective at the shareholders meeting on December 8.

litao@chinadailyhk.com

China Daily

(HK Edition 09/16/2011 page2)