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Kenneth Ko

Hysan Development Co saw net profit jump 13.97 per cent to $864.64 million in the first half, thanks to steady recurrent income and non-core property sales.

  The results were in line with market expectations. Analysts were optimistic about the full-year growth, with some tipping a rise of 30 per cent.

 Operating profit during the six-month period grew 19.3 per cent to $1 billion from $844 million.

 Pre-tax profit of $35.6 million was recorded from contributions of associated companies.

 Earnings per share were 84.03 cents, against 67.81 cents for the same period last year.

 The company will pay an interim dividend of 44 cents per share, from the previous period's 40 cents.

 Turnover for the period rose 9.6 per cent to $1.21 billion from $1.11 billion.

 Analysts said Hysan's rental income base would be enhanced with the addition of Entertainment Building in Central and the completion of the Lee Gardens office complex in Causeway Bay.

 Indosuez W.I. Carr Securities analyst Derek Kwong said the prospect of property rental growth would be steady but not exciting.

 From next year, Hysan would be able to receive full-year contributions from Entertainment Building and Lee Gardens, which was a positive note, he said.

 The interest expenses for Hysan would increase after its $2 billion borrowing to finance the Entertainment Building acquisition.

 Analysts said Hysan was unlikely to see any rapid rental appreciation for residential and office premises, and it would have to rely on treasury income and sales of non-core properties to boost earnings.

 Hysan chairman and managing director Lee Hon-chiu said demand for quality commercial space and luxury residential units was expected to remain strong.

 Analysts were concerned that the company lacked a land bank and large-scale property developments in Hong Kong to enhance earnings growth.

 Hysan has interests in two property projects in Shanghai and several residential developments in Singapore.



Hysan outlook positive after developer shows 13pc interim gain