Affiliates and asset spinoff contribute to bottom line

Cheung Kong, the flagship developer owned by billionaire Li Ka-shing, said Thursday that its first-half net profit more than doubled from a year earlier due to a bigger contribution from affiliate Hutchison Whampoa Ltd and a one-off gain from the spinoff of assets.

Net profit of the company for the six months ended June 30 rose to HK$33.26 billion from HK$12.34 billion a year ago on revenue of HK$26.1 billion, 28 percent more than in the same period of 2010.

Excluding the contribution from Hutchison Whampoa, Cheung Kong's profit of HK$10.13 billion was 10 percent more than the first half of last year.

In April, the company raised 10.5 billion yuan through the listing of Hui Xian Real Estate Trust in Hong Kong's first yuan-denominated stock sale. The transaction contributed HK$1.73 billion to Cheung Kong's first-half profit, the company said in Thursday's statement.

Cheung Kong declared an interim dividend of HK$0.53 per share, compared with HK$0.50 a year ago.

Hong Kong's second largest developer by market value, Cheung Kong made a profit of HK$7 billion from property sales in the first half, up from HK$5.81 billion in the corresponding period of 2010, while profit from property rents rose to HK$919 million from HK$912 million.

Home prices continued to rise in the city despite government cooling measures, however.

Li offered no comment on the much-debated relaunching of the Home Ownership Scheme, a subsidized housing program, saying that the government will take all the pros and cons into consideration before making a decision.

Li reckoned, however, that the mainland housing market will experience a slowdown due to curbs taken by the central government.

"We have seen monetary tightening on the mainland, and this is causing a slowdown," said Li. "We have assets in many places on the mainland, but we can live through this (slowdown)," he added.

Cheung Kong's mainland China assets accounts for 41 percent of the company's total, the highest among major Hong Kong developers.

The company's shares closed trading in the city on Thursday down 0.1 percent at HK$119.6.

emmaan@chinadailyhk.com

China Daily

(HK Edition 08/05/2011 page2)