Hutchison Whampoa is controlled by the Cheung Kong Group, and headed by Li Ka-shing, Asia’s wealthiest man, who has been nicknamed “Superman” because of his investment prowess. Its operations include ports, with property and hotels, retailing telecommunications (Hutchison Telecommunications International) and infrastructure (Cheung Kong Infrastructure).
Hutchison profit rise beats expectations
Hutchison Whampoa shares rose as much as 5 per cent yesterday on better-than-expected interim results and revisions of earnings forecasts by securities firms.
Hutchison's 23 per cent jump in net profit for the first half of the year beat market expectations. It was driven by lower financial costs and a one-off gain on the disposal of mobile brand Yesss in Austria.
The stock closed at HK$91.65 yesterday, up 4.5 per cent.
Bank of America Merrill Lynch revised upwards its target price for Hutchison by 3 per cent to HK$101 and its earnings forecast for this year by 7 per cent to HK$30 billion. Credit Suisse revised upwards its target price to HK$109.70 from HK$105.70. Deutsche Bank raised its target price by HK$3 to HK$100, while JP Morgan moved its target price up to HK$108 from HK$90.
Merrill Lynch analyst Karl Choi said Hutchison showed strength in all divisions except the port operations.
"Broad-based strengths were seen in property, H3G, infrastructure and energy, while ports were the only soft spot," Choi said in a report yesterday.
Hutchison expects to make attributable contracted sales of 10.2 million square feet this year. The company's contracted sales would surge 36 per cent this year to HK$17.3 billion from 2012, Choi estimated.
Management told analysts that its Italian telecommunications operation was on the verge of breaking even after price wars last year. Spending on licence fees is mostly done as Austria will hold the only auction of 4G licences in Europe.
Separately, analysts remained upbeat about parent firm Cheung Kong's full-year earnings as sluggish home sales in Hong Kong could be offset by strong business on the mainland.
Credit Suisse revised upwards its estimate for Cheung Kong's earnings per share this year by 5 per cent and its target price to HK$151.20 after the firm's mainland property sales exceeded expectations. The group aimed to sell more than 10,700 units, or 8.7 million sqft of gross floor area, in residential properties, said Credit Suisse analyst Cusson Leung.
"A recent [734-unit] project in Shanghai, Upper West Shanghai Phase One, was sold out within 24 hours," he said.
Lee Wee Liat, the regional head of property research at BNP Paribas, forecast Cheung Kong would report a net profit of HK$27.08 billion this year and raised its target price to HK$137.70.
"We believe our full-year earnings estimate for this year is achievable since revenue of three projects in Hong Kong [The Beaumont, One West Kowloon and Kennedy Park at Central] will be booked in the second half of this year," he said.
Cheung Kong shares rose 1.7 per cent to HK$113.50.