Hong Kong developer Sino Land reports 99.9 per cent profit jump, as Chengdu property sale boosts bottom line
Revenue from property sales, however, falls by 40.8 per cent year on year to HK$8.89 billion
Hong Kong developer Sino Land said on Thursday its underlying net profit for the first half of 2018 had nearly doubled to HK$11 billion (US$1.4 billion), boosted by the disposal of a property in Chengdu, even as property sales revenue declined.
The company’s underlying net profit to shareholders, excluding the fair value change of its investment properties, and a gain on a 20 per cent interest retained in the Chengdu project, rose by 99.9 per cent year on year. Excluding the one-off gain, its underlying profit was HK$5.4 billion. The company recommended a final dividend of 40 Hong Kong cents per share.
The disposal of an 80 per cent interest in the Chengdu project for HK$10.5 billion contributed to a one-off gain of HK$5.65 billion and a fair value gain on the retained 20 per cent interest of HK$7.62 billion.
Revenue from property sales fell by 40.8 per cent year on year to HK$8.89 billion.
“Sino Land is intensifying its focus on Hong Kong, with a stronger pipeline from the purchase of five housing projects since July 2017. However, its residential sales stay muted in the first half as a key project in Kwun Tong won’t be available for sale until later this year,” according to a Bloomberg Intelligence note.
The Palazzo, the Chengdu project, is a residential, commercial and hotel project that was sold last September to Wealth Express Development, a subsidiary of Shenzhen-listed and state-owned Shenzhen Overseas Chinese Town.
Also on Thursday, Sino Land said it expected to launch three residential projects for sale in the second half of this year. These include Madison Park in Cheung Sha Wan, Mayfair By The Sea 8 in Pak Shek Kok and Grand Central in Kwun Tong.
The group held a total land bank of 21.9 million sq ft, as of June 30, in mainland China, Hong Kong, Singapore and Sydney, 9.3 million sq ft in properties under development and 11.8 million sq ft
in investment properties and hotels.
Tsim Sha Tsui Properties Limited, its parent company, reported a net profit attributable to shareholders of HK$7.3 billion. Its earning per share was HK$4.14.
Sino Hotels (Holdings) Limited, the group’s listed hotels business, reported a net profit of HK$195 million, up 9.6 per cent from a year ago.