Iconic Peninsula Hotel owner’s interim net profit doubles after property revaluation
Chua Hwa Por, who emerged in July as the company’s second-largest shareholder, wrote in to say he has no intention to wrest control of the company from the Kadoorie family, chief executive officer Kwok said.
Hongkong & Shanghai Hotels, the owner of The Peninsula hotel and operator of the tram service to Hong Kong’s Peak, said its first-half profit more than doubled, as higher revaluation of its property portfolio boosted its bottom line.
Net profit jumped to HK$519 million (US$66.4 million), or HK$0.33 per share, due to a HK$359 million gain through a revaluation of its investment property. Excluding the gain, the company’s underlying profit rose 19 per cent to HK$181 million, or HK$0.12 per share.
The interim figure puts the company on track to beat analysts’ estimates of a full-year net income of HK$695.5 million, a 15 per cent increase from last year, according to a Bloomberg poll. The company would pay an interim dividend of HK$0.04, the same amount as the first half of last year.
Controlled by the family of Michael Kadoorie, the company will invest over HK$680 million to renovate the Peak Tram to carry more passengers up to Hong Kong’s highest point.
“The Peak Tram is the most popular tourist attraction in Hong Kong and there are always a long queue,” said Chief Executive Officer Clement Kwok King Man at a press conference in the city. “We will have new cars and new platforms to tailor made for more tourists to cut down their queuing time.”
The Peninsula’s hotel in Beijing reopened this week after a two-year renovation. It will open new hotels in London, Istanbul and Yangon, Kwok said.
The hotel operator’s shares rose as much as 2.7 per cent on Friday before earnings were announced, closing the week little changed at HK$13.94.
The share price has risen 60 per cent in the past six months to a record HK$17.12, after Chua Hwa Por and Tai United Holding Ltd. emerged as the second-largest combined shareholder of the company with a combined stake of 11.8 per cent.
The investor has written to the company to say he has no intention of making a hostile takeover to wrest control from the Kadoorie family’s 53.82 per cent stake, Kwok said.
“The transactions are his financial investments,” Kwok said, citing Chua’s letter, adding that the investor did not request to join the company’s board. Hong Kong regulations allow shareholders with at least 10 per cent stakes to seek board seats.
“Our major shareholder has been owning the company for more than 100 years while Sino Hotels also owns a stake in our company for a long time,” Kwok said. “We have very long term shareholders and we are a very stable company which invested in hotel projects with a long term views.”