Cheung Kong profit slumps on China property weakness
Hong Kong property developer Cheung Kong said Thursday its first-half net profit slumped 54 percent from a year ago, due partly to falling income from property sales.
The cornerstone of billionaire Li Ka-shing’s business empire said its net profit for the six months ended June 30 fell to HK$15.46 billion ($1.99 billion) from HK$33.26 billion a year earlier.
Revenue was 32 percent lower at HK$17.72 billion from HK$26.10 billion, it said in a statement to the Hong Kong stock exchange.
“During the period, residential property prices remained stable in Hong Kong on the back of solid demand from end users,” the company said.
Asia's richest man Li Ka-shing and his son Victor Li (L) attend a press conference (AFP, Philippe Lopez)
But in mainland China, it said property prices and sales were “below expectations as the property market correction has continued”, amid a broader slowdown in Chinese economic growth.
Prices of residential apartments have been falling in Hong Kong, with sales worth HK$31.8 billion in July representing a 6.7 percent fall from the previous month, according to official figures released earlier Thursday.
The earnings contribution to Cheung Kong from 49.97 percent-owned conglomerate Hutchison Whampoa climbed 12 percent to HK$5.10 billion from HK$4.56 billion, the company said.
Cheung Kong has invested heavily abroad as it seeks to broaden its earnings base outside of Hong Kong, which has provided it with a springboard into China.
A consortium led by Li agreed last month to buy British gas distribution company Wales & West Utilities, which supplies 7.4 million customers in Wales and southwestern England.
The group’s ports division started commercial operation of two new deepwater berths last year in the Port of Felixstowe, the largest UK container port, and acquired operating rights to four berths in the United Arab Emirates.
The 84-year-old tycoon has dismissed suggestions that he is about to retire, but in May he confirmed that his eldest son, Victor Li, will eventually control Cheung Kong.
Li, who’s businesses employ 270,000 people in 53 countries, was named the richest man in Asia by Forbes magazine with a fortune estimated at $25.5 billion.
Cheung Kong shares fell 1.06 percent to HK$102.30 at the close of trade in a broadly weaker market, before the results were announced.
Category: Hong Kong
