Hysan, Sino Land slide 6pc after reporting lower profits

PUBLISHED : Thursday, 22 March, 2001, 12:00am
UPDATED : Thursday, 22 March, 2001, 12:00am

Shares in Hysan Development and Sino Land both slid more than 6 per cent yesterday after they announced lower than expected earnings earlier this week.

Hysan's shares dived 6.12 per cent, or 75 HK cents, to hit a low of HK$10.85 before closing at HK$11.50.

The property investment firm's profit fell 29.38 per cent to HK$850.17 million for the year to December 31.

Sino Land's shares closed at HK$3.55, down 6.58 per cent, or 25 HK cents, from Tuesday after it reported that its profit had plunged 70.7 per cent to HK$207.59 million for the six months to December 31.

Since Tuesday, Hysan and Sino Land's share prices have fallen more than 10 per cent.

The weak performance prompted analysts to revise down their forecast earnings for the two developers.

Analysts have already downgraded earnings forecasts for Hysan for the 12 months to December 31 this year to between HK$854 million and HK$899 million.

They have also downgraded their profit forecast for Sino Land for the full year to June 30 this year by 18 per cent, to about HK$777 million.

SG Securities said Hysan's decline in earnings was due to negative rental reversion and a fall in rental profit margins to 78 per cent from the company's expected 83 per cent.

SG Securities expected Hysan's earnings this year to be low because the average vacancy rate remained high at 10 per cent for office space and 7.2 per cent for residential in 2000.

Goldman Sachs said Hysan's result was about 11 per cent below its forecast.

It has revised down its earnings per share by an estimated 11 per cent and 16 per cent in 2001 and 2002 respectively. It has also scaled back its expectation of the rental upside to a maximum of 15 per cent from 20 per cent for this and next year.

As a result it has lowered its rental income by about 11 per cent this year and a further 13 per cent in 2002.