Mainland office developer Soho China’s disappointing earnings in first half leads to stock sell-off
Soho China chairman Pan Shiyi says co-working unit 3Q will be listed in Hong Kong when the market sentiment improves
Investors showed their disappointment with Soho China’s results for the first half by selling the stock.
Excluding the one-off disposal gains on its Sky Soho office project in Shanghai, Soho China, one of China’s largest commercial developers, recorded a core net loss of 3 million yuan (US$436,000) compared to a 116 million yuan profit a year earlier, according to its interim results announced on Friday. Rental income was 848 million yuan, only slightly higher than a year ago and average occupancy ratio was 97 per cent for its major investment properties.
The company said there would be no dividend payout.
Soho’s stock price tumbled as much as 11.3 per cent in Hong Kong after the results announcement, before recovering to close 6.8 per cent lower. This was in contrast to the rally in Chinese property stocks, led by China Vanke’s 6.3 per cent rise, on optimistic earnings outlook.
“The results were very disappointing,” said Raymond Cheng, a property analyst with CGS-CIMB Securities. “We have a sell rating on Soho. We believe the share price should react negatively on this set of bad results.”
Of the 10 broker ratings on Soho, three have “sell” and five “hold”, according to Bloomberg data.