Wing Tai Properties net profit more than doubles to HK$1 billion in H1 on W Square divestment in Hong Kong

EARNINGS soared in the first half of the year at Wing Tai Properties, thanks to a gain on disposal of subsidiaries, amid a boom in Hong Kong's property market.

Net profit more than doubled to HK$1 billion (S$180.5 million) for the six months to June 30 at the Hong Kong associate of Singapore-listed Wing Tai Holdings, up from HK$449.8 million the previous year, according to unaudited results released on Friday.

The bottom line was boosted by a bumper HK$693.3 million gain on the divestment from W Square, an office and retail complex in Wan Chai, Hong Kong, which had a gross floor area of about 129,000 sq ft.

But turnover was down by 14 per cent year on year, to HK$469.5 million, on sharply lower sale of properties and project management income.

The hit came in Wing Tai Properties' home market of Hong Kong, where revenue contributions fell to HK$428.7 million, from HK$510.8 million in the previous year. Still, revenue from Singapore operations was up, rising to HK$14.8 million, from HK$11.1 million before.

The group also counts Britain and mainland China among its markets.

Chairman Christopher Cheng Wai Chee noted in the results announcement: "During the first half of 2018, notwithstanding two rounds of US interest rate hikes, Hong Kong's residential market continued to thrive with record-breaking land and home prices across the board, sustained by strong pent-up demand from end-users and investors amid a supply shortage.

"In the second quarter we launched Le Cap, one of our latest luxury low-density residential developments at Kau To Shan, achieving record-high unit prices in this new district for the house and special apartment units. Revenue of respective units being sold will be recognised upon handover throughout 2018 and 2019."

Still, the Hong Kong economy and property market will be more challenging in the rest of the year, Wing Tai Properties said in its outlook statement, citing trade tension between the United States and China, interest rate hikes, yuan and stock market fluctuations and local government cooling measures on residential property.

But the group did not rule out fresh acquisitions, adding: "It is always our long-term business strategy to accelerate the expansion of our strategic land bank and enhance our investment portfolio in the residential, commercial and/or hospitality arenas.

"With a strong financial position and surplus cash on hand, we will continue to uphold our proactive yet prudent approach to take advantage of the opportunities that come along to acquire yield-enhancing investment properties in Hong Kong and London."

Earnings per share stood at HK$0.77, against HK$0.33 previously.

An interim dividend of six HK cents a share has been declared for the year to Dec 31, up from 4.5 HK cents in the year before.

Singapore's Wing Tai Holdings shed S$0.02, or 1 per cent, to S$1.98, before the results.