Amazing Kwoks a hard act to follow

THE Kwok brothers, Walter, Thomas and Raymond - admired about town as great strategists - appear to have done it again.

Defying gravity, the Sun Hung Kai trio appear to have made their profits and margins rise in a falling sales market.

Who else could make interim profits go up 16 per cent on less than half the property sales turnover of the previous year, you may ask.

Admirers may hail them as great magicians to have pulled off such a feat in a down market.

But because of the strange nature of booking profits in the property sector, you could argue Sun Hung Kai was heading for good results at interim stage, irrespective of whether the Government stepped in to cool prices and speculation in the residential property market last March.

The company's biggest single profit contribution came from the booking of big profits from pre-sales of luxury apartments at Villa Athena in Sha Tin.

The units were pre-sold at the peak of the market during the last financial year, but because of traditional accountancy practices, the profits were not booked until the first half of the current financial year when the project was completed and final payments from buyers banked.

Likewise with a few other projects.

In addition, the company benefited from strong rental reversions on its growing property investment portfolio, which at interim stage stood at 12.6 million sq ft.

With all this in mind, it could be argued Sun Hung Kai's interim result was partly a hangover from the pre-slump boom.

The true test of Kwok brothers' abilities will come if they can pull off a repeat performance of their success both in the second half and in 1995.

Despite having the odds against them, the signs are at this stage they will.

By sheer luck, Sun Hung Kai had little in the way of projects close to reaching government sales consent stage when the sales slump was at its worse.

This was not broken until the launch of Royal Ascot at Sha Tin earlier this month, which kick-started a mini post Lunar New Year buying wave.

With buyer sentiment still on the mend, Meadowland in Yuen Long is now about to be launched, further improving Sun Hung Kai's cash flow.

But with other developers eager to clear their stockpiles of unsold flats and buyers currently spoilt for choice, the brothers are going to find it increasingly hard to stage a repeat performance of their magic act.