K Wah surges on stellar results

Shares in K Wah International surged almost 10 per cent yesterday after the property developer stunned the market with a seven-fold increase in interim net profit, from 411 million yuan (HK$502.86 million) to 2.89 billion yuan.

Shares in the listed property investment arm of the privately owned conglomerate K Wah Group rose 9.9 per cent to close at HK$3.33 after the result announcement for the six months ended June 30.

"As we are a medium-sized developer, our supply of flats will vary. It is difficult to make a forecast," chairman Lui Che-woo said. "But I think our performance will be good in the second half."

The developer generated revenues of HK$3 billion from contracted sales of four new projects in the first half. Three of the projects - The Coronation, in West Kowloon; and Providence Bay and Providence Peak, in Tai Po - are scheduled for completion in the second half and ready to make contributions.

Herbert Hui, K Wah International director of corporate finance, said most of the flats at The Coronation and half of those at Providence Bay had been sold.

There is a widespread expectation in the market that the government may release more measures to curb property demand and price growth, but Lui believed that whatever measures might be introduced would have a limited impact on the company. "We recently bought a site in Tseung Kwan O for HK$1.69 billion and we will continue to buy prime sites in Hong Kong."