Hopewell Holdings and its Hong Kong-listed subsidiary, Hopewell Highway Infrastructure (HHI), are expected to benefit from the green shoots of economic recovery in the Pearl River Delta.
'We expect [Hopewell's] underlying profit to drop 76 per cent year on year to HK$1.31 billion due to the large exceptional profit booked in fiscal year 2008,' Credit Suisse analyst Cusson Leung wrote in a report. 'However, the stock is a good proxy to get exposure to the economic recovery in the Pearl River Delta.'
For the fiscal year to June 2008, Hopewell's net profit jumped 127 per cent to HK$5.97 billion, mainly because of HK$4.79 billion of exceptional gains from selling the Nova City property project in Macau and a joint venture managing the Guangzhou East-South-West Ring Road.
Stripping out the one-off items, Hopewell's net profit last fiscal year would have been reduced to HK$1.18 billion.
That means Credit Suisse's net profit forecast of HK$1.31 billion for fiscal year 2009 would be 11 per cent higher than last year's earnings.
Six analysts surveyed by Bloomberg have a consensus forecast of HK$1.45 billion net profit for Hopewell on revenue of HK$1.05 billion for the fiscal year to June.
Infrastructure, operated by Hopewell's toll-road subsidiary HHI, accounts for the lion's share of the group's profit, with property a distant second and hotels third.
