K Wah International reports 2016 underlying profit up 113pc, lifted by robust sales
K Wah International Holdings reported 2016 underlying profit jumped 113 per cent to HK$2.8 billion (US$360.53 million), lifted by robust property sales in Hong Kong and the mainland.
The mid-sized developer said profit attributable to equity holders rose to HK$3.18 billion, compared to HK$1.37 billion a year earlier, according to a filing to the Hong Kong stock exchange on Tuesday.
Mainly driven by sales of Grand Summit in Shanghai, J Wings and J Metropolis in Guangzhou, Silver Cove in Dongguan, Twin Peaks in Hong Kong, as well as the rental income of the Shanghai K Wah Centre, the developer saw its revenue rise to HK$9.6 billion compared to HK$4.7 billion in 2015.
The gains came as Hong Kong, the least affordable city in the world, saw record home prices against a backdrop of a slowing economy and dwindling mainland tourist visits.
“Hong Kong’s property market has seen a roller coster year in 2016,” said Lui Che-woo, chairman of K Wah. “Although the government rolled out new cooling measures for the sector, strong demand from home buyers has supported the sector to maintain stable growth.”
Low interest rates, smaller units rolled out by developers, as well as strong interest among mainland Chinese property investors have propelled the property market despite a raft of cooling measures, which includes an expansion of stamp duties for property transactions for the first time in three years in November.
K Wah said attributable contracted sales of the group amounted to HK$13 billion in 2016, with HK$6.7 billion expected to be recognised in 2017 and 2018, helped by robust sales of joint projects in Hong Kong, Shanghai, Nanjing, Dongguan and Guangzhou.
Earnings per share amounted to HK$1.07. The company declared a full year dividend per share of 18 HK cents.
The developer said it was planning to offer additional housing units in 2017, as it has been buying new lands at record prices both in Hong Kong and mainland.
K Wah beat out 15 mainland and Hong Kong developers in December by paying HK$ 5.9 billion for a residential site at the Kai Tak area in eastern Kowloon.
K Wah said it was confident on the property market outlook with prices to remain stable in 2017.
“The overall residential market price however seems unaffected and remains on the upward trend commenced in March 2016,” the company said in the filing.
K Wah’s shares were up 1 per cent to HK$4.99 in afternoon trading in Hong Kong following the midday results announcement.