CHEUNG Kong is in a strong position to benefit from a perceived upturn in the Hong Kong property market, according to Smith New Court.
The market is looking increasingly upbeat due to the stabilisation of rental prices, strong underlying demand for apartments and optimism over Hong Kong's long-term economic development, the brokerage says.
Cheung Kong, meanwhile, has agreed on the premium for the Hok Un site and has announced acquisitions or joint ventures at Cheung Sha Wan, Kowloon Bay and Mongkok.
In its recent results, operating profit fell more than 50 per cent but there were no fundamental concerns. Investment and finance income are largely in place and share dealing in 44 per cent-owned associate Hutchison Whampoa will provide an earnings buffer for the full year.
Cheung Kong has now sold about 2,700 flats at its mega-project Kingswood Villas. While sale prices are 30 per cent below their peak, price discounting has sparked market interest and helped to reverse sentiment.
Despite a 1.1 per cent downward revision for 1995 net profit, Cheung Kong remains at a 30 per cent discount to the market price-earnings ratio.
