Wharf aims for higher sales amid record profits
Company plans 30 billion yuan expansion drive, voices confidence in China property market
Defying Beijing's tough measures to cool the property market, The Wharf (Holdings) plans to fork out nearly 30 billion yuan (HK$37 billion) to expand its retail-office-hotel portfolio over the next three years.
It also raised its sales target by a third for this year, after announcing record profits.
With a net cash holding of HK$18 billion and an undrawn bank loan of HK$17.8 billion, the property conglomerate said there was no immediate plan for a cash call.
It said it planned to achieve 20 billion yuan in sales this year, compared with 15 billion yuan last year. It announced the ambitious target after reporting that core earnings last year rose 37 per cent to HK$11.04 billion, its highest ever. The strong results were largely driven by soaring rental income and development profit.
The company recommended a final dividend of HK$1.2, up 71.42 per cent.
"The latest round of cooling measures on the mainland has had no immediate impact on property sales but we will continue monitoring the situation. Although the mainland property market is plagued by policy risks in the short run, we are confident about the outlook," deputy chairman and managing director Stephen Ng Tin-hoi said.
A strong financial position would make the group more resilient in an abrupt change in market conditions, he said.
The group plans to complete five retail-office-hotel projects - Chengdu International Finance Square (IFS), Chongqing IFS, Suzhou IFS, Wuxi IFS and Changsha IFS - between 2014 and 2016.
He said the 740,000 square metre Chengdu IFS was due to be completed next year and the 725,000 square metre Changsha IFC in 2016. These two would cost about 30 billion yuan, while the rest were smaller in scale.
After these projects are completed, the group's total investment properties in Hong Kong and the mainland will rise to 49.7 million square metres.
Ng also said now might not be the best time for the government to grant a new free-to-air television licence as tackling housing and poverty were the administration's top priorities.
Wharf's pay TV and internet services arm, i-Cable Communications' subsidiary Fantastic Television; HKTV; and PCCW have been battling for a terrestrial TV licence for over three years. Shares in Wharf rose 2.38 per cent to HK$64.45 yesterday.