SHK Properties posts record profit despite scandal

Sun Hung Kai Properties, the world’s second-largest real estate developer, posted earnings that narrowly beat expectations on Thursday, building on last year’s impressive performance thanks to strong property prices and low interest rates.

The company, whose billionaire co-chairmen are facing charges in an alleged bribery case, reported a record underlying profit of HK$21.7 billion for the company’s this year fiscal year that ended in June, compared with HK$21.5 billion last year.

Analysts had expected underlying income of HK$21.0 billion for the this year year, according to StarMine, based on the mean estimate of 19 analysts polled by Reuters.

Since the results are based on sales locked last year, the company’s performance has yet to see any effect from the high-profile scandal involving brothers Thomas and Raymond Kwok.

The company’s co-chairmen, who deny any wrong-doing, are due in court next month to face charges that they paid a senior government official to favour their interests.

The Kwoks deny any wrongdoing, and Rafael Hui, a former Hong Kong chief secretary who has also been charged over the case, has not commented since his arrest.

Once the darling of the investment community and considered one of Hong Kong’s best-run companies, Sun Hung Kai’s shares have underperformed peers since the arrests. The stock is down 7.9 per cent in the last six months, compared with a 3.3 per cent gain in the Hang Seng Properties Index. It rose 0.75 per cent on Thursday.