Li Ka-shing unfazed by slump in Hong Kong property market
Cheung Kong chief says the impact from slowing home sales in the city will be offset by income growth from diversified businesses overseas
Cheung Kong chairman Li Ka-shing says the impact of a slowdown in property sales will be lessened by the growth of other income sources outside the city.
"I do not worry about the outlook," Li said yesterday after announcing a better-than-expected 10 per cent rise in the firm's net profit to HK$35.26 billion last year because of contributions from Hutchison Whampoa.
Excluding gains of HK$15.54 billion from Hutchison, profit was 3 per cent higher than a year earlier at HK$19.72 billion.
Li said Hong Kong business accounted for about a third of Cheung Kong's sales.
"The slowdown of property sales [in Hong Kong] will not harm us seriously," he said.
The number of property transactions - residential, commercial and industrial - dropped 30 per cent year on year to 5,817 in January, according to the Land Registry.
Centaline Property's Centa-City Leading Index, which tracks second-hand home prices at 100 housing estates, fell 0.6 per cent last week, taking the decline since the beginning of the year to 1.4 per cent. The index is also down 5.1 per cent from its peak in March last year.
Li said home prices would not see any sharp falls as construction costs kept rising. Developers were also financially healthy, which meant they were in no rush to cash in by slashing prices.
"While the group's pre-sale of property in Hong Kong did not meet projections last year, our established, globally diversified businesses have supported the positive growth of our overall group," Li said.
Profit before property revaluation gains amounted to HK$17.91 billion, up 26 per cent.
"Property sales in Hong Kong last year were much lower than in 2012," Li said. "However, contributions from property sales in markets outside of Hong Kong, including the mainland, have increased."
Cheung Kong, the largest developer in the city by market value, saw property sales rise 4 per cent to HK$27.59 billion, compared with HK$26.52 billion in the previous year, higher than analysts' forecast.
Contributions came from Hong Kong developments such as La Splendeur and the Beaumount, both in Tseung Kwan O. It also reaped from sales in Singapore and mainland cities including Chengdu, Qingdao, Dongguan and Shanghai.
Profits were also helped by increased contributions from investments and financing as well as a one-off gain from the disposal of the Kingswood Ginza property in Tin Shui Wai.
Directors recommended a final dividend of HK$2.90 per share, bringing the full-year dividend to HK$3.48 share, up from HK$3.16 a share in 2012.
Shares of Cheung Kong closed up 0.91 per cent yesterday at HK$121.60. The Hang Seng Index edged up 0.04 per cent.