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Peggy Sito

Hing Kong (Holdings) has said a provision of $238 million for the drop in the value of its property projects and securities investment had caused an interim loss of $263.69 million in the six months to June.

 The property arm of China Travel Services Holdings (CTS), and formerly known as Sun Fook Kong Holdings, said yesterday the loss compared with a profit of $60.09 million for the same period last year.

 Losses per share were 23.9 cents, down from earnings per share of 6.9 cents previously.

 Chairman Zhu Yuening said the provisions came mainly from a $64 million permanent diminution in the value of its 20 per cent stake in property firm Wah Tak Fung Holdings, bought last year.

 The company also made a $174 million provision for the reduction in value of interest in a property project.

 Hing Kong did not identify the development but it is believed to be Tycoon Place in Tai Po, a luxury project jointly owned by Lai Sun Development and Hong Kong Parkview Group.

 Mr Zhu said due to the financial crisis, credit squeeze and higher interest rates faced by the local property market, the response to June's public sale was poor.

 The consortium this month decided to cut some prices to below the development cost.

 Hing Kong said after making the provision, the project would contribute a profit once confidence in the property market was restored.

 In March, Hing Kong acquired a 73,152 square foot Yuen Long site through a government land auction.

 The project, when completed in 2000, will provide a floor area of 2.19 million sq feet.

 During the period, Hing Kong made $26.37 million in operating profit before provision but made a loss of $52.2 million from associated companies.

 Turnover fell to $48.62 million from $426.62 million.

 Directors did not declare an interim dividend during the period.

 In its mainland property division, Hing Kong said it had invited a Hong Kong listed property firm to take a 15 per cent stake in its property development in Xuan Wu district, Beijing.

 It did not identify the company.

 It is also negotiating with mainland authorities for the change of use of the group's Dalian property from commercial to residential.



Hing Kong mauled by $238m provision