A downcast Raymond Kwok Ping-luen (center), chairman of Sun Hung Kai Properties, is now solely at the company's helm following the conviction of his elder brother Thomas Kwok Ping-kwong last week for corruption. Parker Zheng / China Daily

Property giant's share price surges 2.2% as uncertainties vaporize after graft trial

The conviction of Thomas Kwok Ping-kwong - one of the two co-chairmen of Sun Hung Kai Properties Ltd (SHKP) - in the city's high-profile corruption trial has not dampened investor confidence in the property giant.

SHKP shares rose 2.2 percent on Monday to close at HK$115.8 apiece, outperforming the benchmark Hang Seng Index which climbed 1.3 percent to 23,408.57.

Stock analysts said the end of the trial has removed the uncertainties that, for more than two years, have been troubling the company - the world's second most highly valued real estate developer.

"SHKP has already shown the market that its business has remained on course, with buoyant property sales bolstered by a sizable land bank built up in the past two years," said Alfred Lau, a Bocom analyst covering Hong Kong and mainland property stocks, on his company's website.

"The market may view the result (of the trial) as slightly positive, helping to avoid some technical sell-off," he wrote.

Kwok stepped down as SHKP co-chairman with immediate effect after he was convicted of conspiring to pay HK$8.5 million ($1.1 million) in bribes to Hong Kong's former No. 2 official Rafael Hui Si-yan.

His resignation leaves his younger brother, Raymond Kwok Ping-luen, who was acquitted of all four charges at the same trial, at the company's helm.

Lau said SHKP has remained fundamentally intact and the trial's outcome should have little impact on the company's prospects.

According to Merrill Lynch, SHKP has been the most active bidder in government land tenders in the past two years.

The company said earlier its sales of residential units amounted to HK$12 billion from July to November this year, accounting for half of its target sales in fiscal 2015, according to Morgan Stanley's research.

Merrill Lynch said the court case involving the Kwok brothers had a negligible impact on the group's operations, while Morgan Stanley believed that SHKP's fundamentals have remained solid as the overhang of the court case ended.

Victor Lui Ting, deputy managing director and executive director of SHKP, said the company has been unaffected by the management reshuffle and would continue to be an active bidder in land sales.

Ben Kwong Man-bun, director of research at Hong Kong-based KGI Asia, told China Daily that SHKP could maintain its current operations despite the convictions and management shake-up because the company's day-to-day operations are well managed by a team of professionals.

The interim management structure, which has been in place for the past two years, has enabled SHKP to maintain good execution of its strategy and operations, said Standard & Poor's, which expects SHKP to achieve strong sales in the next 12 months, supported by a robust primary property market in Hong Kong and the company's excellent sell-through rate so far in the second half of 2014.

sophia@chinadailyhk.com

(HK Edition 12/23/2014 page8)