Hong Kong company reporting season

Hong Kong developer Shui On sees 38pc rise in annual profit on robust mainland sales

Revenue surges 172pc to 18bn yuan. Current landbank sitting at 12.1 million square metres. Rental income rises 6pc to 1.7bn yuan

PUBLISHED : Wednesday, 22 March, 2017, 10:42pm
UPDATED : Wednesday, 22 March, 2017, 11:37pm

Property developer Shui On Land has delivered a 38 per cent rise in annual profit, on the back of robust mainland project sales.

The company said on Wednesday its profit attributable to shareholders was 1.1 billion yuan (US$159.5 million) for the year ended 31 December 2016, up from 788 million yuan the previous year.

Revenue also surged 172 per cent to 18 billion yuan, according to its statement to the Hong Kong Stock Exchange.

The company sold total a gross floor area of 950,600 square metres and pre-sold at an average selling price of 24,200 yuan per sq m. Its rental and related income also increased, by 6 per cent to 1.7 billion yuan. Its land bank stood at 12.1 million sq m.

Led by increased sales at its flagship Shanghai Taipingqiao, Shanghai Rui Hong Xin Cheng and Wuhan Tiandi projects, the company saw gross profit margins on sales reach 30 per cent in 2016, compared with 11 per cent in 2015.

Vincent Lo Hong-shui, its chairman, said the company was “in contact” with several developers and investors who were interested in buying part of the stakes in its Shanghai Ruihong Xincheng project, including mainland property titan China Vanke.

“In fact, we have talked to several developers who showed interest,” Lo said, without giving further details.

Shui On Land, which has pioneered a number of high-profile heritage sites such as its landmark Shanghai Xintiandi project, was in talks previously to sell up to half of the Ruihong Xinchengmixed residential and commercial project to pare down debt.

Located in Shanghai’s golden triangle area between The Bund waterfront, the northern Bund and the Lujiazui business district, Ruihong has 1.74 million sq m of proposed gross floor area.

The company is offering a dividend for 2016 at 3.9 HK cents per share, compared to 2.8 HK cents in 2015.

It currently has eight projects in mainland Chinese cities including Shanghai, Chongqing, Wuhan, Dalian and Foshan.