K Wah International posts 276pc surge in underlying interim profit
Mid-sized developer chaired by property tycoon Lui Che-woo says direct impact of Brexit on Hong Kong and the mainland will be limited
K Wah International has posted a 276 per cent rise in its underlying profit for the six months to June 30 as property sales in Hong Kong and mainland China surged.
The mid-sized developer, chaired by property tycoon Lui Che-woo, said underlying profit before fair value gain of investment properties increased to HK$1.81 billion. Net profit rose 255 per cent to HK$1.89 billion.
Total revenue rose 130 per cent to HK$5.54 billion , which was mainly derived from the property sales of its Twin Peaks project in Hong Kong, Grand Summit in Shanghai and J Wings in Guangzhou, as well as from rental income from the Shanghai K. Wah Centre.
K Wah reported a moderate decrease in fair value of HK$236 million on its non-current investment of an 3.8 per cent interest in Galaxy Entertainment Group, which owns and operates hotels and casinos in Macau.
Attributable contracted sales mounted to HK$6.7 billion for the six months with HK$4.2 billion expected to be recognised as revenue in the second half of 2016 and the two years ending 2018. the company said in the filing to the stock exchange.
Earnings per share was 66.82 HK cents, and the company announced an interim dividend per share of five HK cents, unchanged from the same period last year.
K Wah said the business environment in the first half of the year was challenging and will continue to be so in the second half.
Brexit will inevitably slow down economic recovery in Europe but the direct impact on Hong Kong and the mainland will be limited, the company said in a statement, adding it was cautiously optimistic about the residential markets in the cities in which it operates.
In Hong Kong, supply of residential units is expected to increase in the next few years.
However, with abundant liquidity and low interest rates, coupled with genuine underlying demand, the company expects the Hong Kong housing market to remain stable and small sized units will continue to be the most active segment in the overall market, it said.
K Wah shares fell 1.2 per cent to HK$4.1 by 12.30 pm. They have risen 18.84 per cent in the past 12 months, against a 7.5 per cent rise in the Hong Kong HSI Index.