Hong Kong's largest developer posted a second straight annual gain in profit after three consecutive down years during the market slump. Underlying earnings, which exclude property revaluations, reached HK$22.9 billion in the 12 months ended June 30, slightly below Bloomberg's HK$23.2 billion consensus. The update came in a Thursday filing.
Sales did much of the work: property sales generated HK$8.3 billion of profit, and contracted sales totaled HK$40.6 billion over the period. Rental income also ticked higher, up 2% year over year.
Analysts point to three pillars for the rebound this year: firm demand from mainland Chinese buyers, limited inventory, and higher rental yields. They also warn that some buyers are turning cautious amid China's steps to limit capital outflows from the mainland.
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Beyond housing, Hong Kong's prime office scene is picking up after a long stretch of weak demand and high vacancies. A healthier economy and a burst of equity capital market activity are prompting financial firms to expand and upgrade their space.
Sun Hung Kai said it plans a HK$3.91 per-share dividend for the full year, 4% higher than last year. The stock is up 23% so far this year, compared with a 2.6% decline in the HSI. For everyday investors, the picture is improving: sales are flowing, rents are firming, and offices are healing, though sentiment could still be swayed by mainland capital controls.
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