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Hong Kong company reporting season

Shui On Land’s first half profit rises 13 per cent

The company says it has achieved 66 per cent of the year’s sales target in the first seven months

PUBLISHED : Wednesday, 23 August, 2017, 8:29pm
UPDATED : Wednesday, 23 August, 2017, 11:00pm

Shui On Land, chaired by Vincent Lo Hong-shui, says it remains cautious on the company’s outlook, despite having already locked up more than half of this year’s 21 billion yuan (US$3.2 billion) sales target.

The company had achieved contracted sales of about 14 billion yuan , or 66 per cent of the full year target in the first seven months of this year, said Lo, after the company posted a 13 per cent rise in core earnings for the first half of 2017, compared with the year-earlier period.

Underlying profit, excluding revaluation gains on investment properties, rose 1.25 billion yuan in the six months to June, up from last year’s 1.1 billion yuan.

“We have no plan to cut selling price although the mainland real estate market is gripped by a slew of cooling measures,” Lo said at a post result briefing on Wednesday.

“We will try our best to achieve our sales target, such as by speeding up sales,” he said.

Lo said the mainland government had launched a series of local and national measures designed to stabilise the property market.

“These are unprecedented measures and include the imposition of controls in granting pre-sale permits, price controls, restrictions on home purchases and residential mortgages,” he said.

We have no plan to cut selling price although the mainland real estate market is gripped by a slew of cooling measures
Vincent Lo, Shui On Land

The firm has about 10 billion yuan worth of properties available for sale in the second half of this year and in 2018, he said.

“These measures have not curbed actual demand for properties which remains very strong. But they have affected the timing of sales,” he said.

Lo said the group had reduced its gearing ratio to 57 per cent from last year’s 68 per cent.

Shui On Land, which owns Shanghai Landmark Xiantiandi, said turnover increased by 185 per cent to 10.12 billion yuan in the first half.

“The strong growth was driven by robust residential sales contracted, and from disposing the majority equity interests in the portfolio of 11 parcels in the Chongqing project,” according to the company’s statement to the Hong Kong’s stock exchange. It said rental income also increased by 19 per cent to 946 million yuan.

Net profit, including revaluation gains on investment properties, rose 17 per cent to 898 million yuan.

The profit was boosted by the sale of a 79.2 per cent of the interests in the Partnership Portfolio in the Chongqing project for 4.13 billion yuan to China Vanke.

Shui On will pay an interim dividend of 3 HK cents per share.

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