SHKP sees tough times ahead for property developers in Hong Kong
Greater competition for buyers and heavy subsidies on taxes will hit profit of city's property firms next year, the developer warns market
Sun Hung Kai Properties, the city's largest developer by market value, expects competition to heat up next year, with heavy subsidies on stamp duties to cut profit margins, after it reported a 14.99 per cent increase in full-year core profit.
Driven by increased property sales and solid growth in rental income, SHKP reported underlying profit, excluding revaluation gains on investment properties, of HK$21.41 billion, lower than the HK$21.55 billion consensus estimate of 16 analysts compiled by Bloomberg.
For the year ended June, net profit dropped 16.86 per cent to HK$33.52 billion due to smaller revaluation gains on investment properties.
Turnover rose 39.61 per cent to HK$75.1 billion.
Profit generated from property increased 46.17 per cent to HK$10.51 billion, while net rental income grew 17 per cent to HK$14.27 billion.
SHKP declared a final dividend of HK$2.40 per share, the same as last year.