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Li Ka-shing

Li Ka-shing hopes to raise payout for Cheung Kong Property this year

Developer sees core profit jump 29 per cent in first full-year result announcement since reorganisation in 2015

PUBLISHED : Thursday, 17 March, 2016, 5:07pm
UPDATED : Thursday, 17 March, 2016, 11:13pm

Tycoon Li Ka-shing says he hopes to raise the dividend payout for Cheung Kong Property Holdings this year after Hong Kong’s second-largest developer saw underlying profit grow 29 per cent year on year in 2015.

His remarks came after CK Property reported on Thursday core profit, excluding revaluation gains on investment properties, amounted to HK$15.57 billion in its first full-year result announcement following a group reorganisation last year.

The developer declared a final dividend of HK$1.05 a share, taking the full-year payout to HK$1.40. Revenue rose 82 per cent to HK$58.79 billion.

“Last year, I said we would increase the dividend payout. In 2016, I hope we may increase it, barring any unforeseen circumstances such as an unexpected slowdown in the Hong Kong and global economies,” Li said.

On the outlook for the city’s property market, he said construction costs had already surpassed land prices.

“Given falling property prices, those who bought [properties] last year would have incurred losses,” he said.

Hong Kong’s overall home prices have dropped 11 per cent from their peak in September last year.

Li, however, said he did not see any risk of a property bubble in mainland China’s first-tier cities.

“One or two projects in Shenzhen have probably seen prices surging, but overall we do not see a sharp rise,” he said.

Net profit at CK Property last year remained flat at HK$17.11 billion, beating market estimates of HK$16.07 billion in a poll by Thomson Reuters.

Li said the developer would not join the bidding war when it came to land acquisitions.

READ MORE: Live blog – Li Ka-shing’s CK Hutchison and CK Property top annual profit estimates

Last year, it won the Lohas Park phase eight development in Tseung Kwan O in September, and the project will require a total investment cost of HK$10 billion.

Alfred Lau, an analyst at Bocom International, said the group’s Hong Kong land bank was only enough for development for the next two to three years.

“Although the firm has large land reserves on the mainland, investors are still concerned about its exposure in the city’s property market,” said Lau.