004｜Kowloon Warehouse's basic net profit increased by 46.7% to over HKD 4.1 billion last year; second interim dividend of HKD 0.2; Hong Kong's property market regains momentum

Wharf Holdings Limited (00004)
Last year, net profit increased by 46.7% to HKD 4.104 billion, mainly due to reduced impairment provisions for Mainland China property development. When including the net revaluation gains and other non-cash items related to investment properties, attributable profit was HKD 50 million, reversing last year’s loss. Wharf paid a second interim dividend of HKD 0.2 per share.

Wharf expects the Hong Kong property market to regain momentum driven by government measures and a rebound in the capital markets. However, interest rate fluctuations and inventory backlog may continue to pose challenges. In Mainland China, factors such as a sluggish real estate market recovery, ongoing weakness in the labor market, and overcapacity still pose downside risks to economic growth, weaken consumer spending, and necessitate additional stimulus measures to boost related industries.

Hong Kong Property Sales Revenue Up 66%

Benefiting from improved stock market sentiment and government measures such as the enhanced “New Capital Investor Entry Scheme,” the luxury property market has shown initial signs of recovery. The group strategically advances sales deployment for The Peak and Kai Tak projects. Based on attributable share, revenue from development properties increased by 254% year-on-year to HKD 1.14 billion, with operating profit rising 66% to HKD 287 million. As of year-end, unrecognized sales amounted to HKD 1.06 billion.

Demand for new office space in Mainland China remains insufficient, with oversupply worsening. Investment property income in Mainland China declined by 3% to HKD 4.42 billion, with operating profit down 4% to HKD 2.88 billion.

Hotel Operating Profit Breaks Even

In Mainland China, after halting land acquisitions since 2019, the available inventory for sale has been gradually depleted, with remaining stock mainly consisting of office buildings. The signed sales amount for the year was HKD 1.12 billion, primarily from projects in Suzhou and Hangzhou. Based on attributable share, revenue decreased by 58% to HKD 1.36 billion, with operating profit dropping 73% to HKD 210 million.

In the hotel segment, revenue from owned and managed hotels increased by 6% to HKD 660 million, reaching breakeven. Logistics infrastructure revenue fell 3% to HKD 2.13 billion, with operating profit down 12% to HKD 280 million.

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