Hong Kong developer Henderson Land reports rise in annual profit, banks on vaccine boost and more than doubles units available for sale in 2021

Sandy Li
·4-min read

Henderson Land Development, the third-largest developer in Hong Kong, said on Tuesday it would more than double the amount of residential units available for sale this year to 8,100 homes.

The company, which reported a 1.8 per cent increase in its core profit for 2020, said the roll out of mass vaccinations and economic stimulus measures across the world would boost public confidence in global economic recovery.

“The number of confirmed Covid-19 cases has generally declined around the world. With the invention of different types of vaccines and the roll out of mass vaccinations, the pandemic is expected to subside gradually,” the company said in its annual results statement filed with the Hong Kong stock exchange.

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The increase in the number of units available for sale at Henderson Land projects follows a strong response to new launches over the past couple of months. The prices of Hong Kong’s lived-in apartments rose by 0.13 per cent in January, ending three straight months of decline, according to Rating and Valuation Department data.

The government’s home price index, however, is still down 4.3 per cent from a record high in May 2019. Meanwhile, the city’s unemployment rate rose to 7.2 per cent in February, its highest level since 2004, according to the Census and Statistics Department.

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Tuesday’s result is the second set reported by Henderson Land under the chairmanship of brothers Peter Lee Ka-kit and Martin Lee Ka-shing, who took over from their father Lee Shau-kee in 2019. Lee is Hong Kong’s second-richest man and his net worth is estimated to be US$32 billion by Forbes.

The company’s core profit increased to HK$14.9 billion (US$1.9 billion), driven by a gain of HK$3.6 billion from the sale of a plot of land in Wo Shang Wai in Yuen Long. It is believed that China Evergrande Group bought the land from Henderson Land for HK$4.2 billion. Henderson Land plans to pay a final dividend of HK$1.3 per share, bringing its full-year dividend to HK$1.8 per share, on par with last year. Its shares edged up 0.15 per cent to HK$34.35 a share before its earnings were announced on Tuesday. By comparison, Hong Kong’s benchmark Hang Seng Index has declined 1.34 per cent so far this year.

The developer is also banking on a low interest rate environment to support Hong Kong’s property market. Last year, it only made 3,900 units available for sale. Henderson Land’s Hong Kong land bank amounts to a total attributable gross floor area of about 24.4 million sq ft.

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Elsewhere, Hong Kong headquartered Shui On Land reported a net loss of 740 million yuan (US$113.6 million) for 2020, compared with a net profit of 1.93 billion yuan in 2019. The developer took into account a revaluation loss from investment properties and impairment provisions for commercial land costs because “significant impact from the Covid-19 outbreak” had led to a substantial decline in fair values.

The company’s board did not recommend the payment of a final dividend for the year ending December 31, 2020, compared with a dividend of 8.4 HK cents in 2019. The payment of dividends might be resumed later, as the company’s business had started to recover in the second half of last year, said Vincent Lo, Shui On’s chairman. The pandemic had “dealt a devastating blow to economies and people’s daily lives around the world”, he added.

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