HANG Lung Properties Ltd, Hong Kong's fourth-biggest developer by market value, said full-year underlying profit more than doubled on increased rental income from commercial properties in China.
Earnings, excluding revaluation gains and deferred tax, rose to HK$5.12 billion (US$656 million) in the year ended June 30, from HK$2.05 billion a year earlier, Hang Lung said in a Hong Kong's stock exchange filing yesterday. That beat the median estimate of HK$5.06 billion from six analysts surveyed by Bloomberg News.
Hang Lung's leasing business accounted for 47 percent of operating profit, benefiting from surging commercial rents in China. The owner of the Plaza 66 complex in Shanghai is investing 40 billion yuan (US$5.8 billion) in retail and office projects in as many as 11 Chinese cities.
"Rental income from China was really beyond my expectations," said Eva Lee, a Hong Kong-based analyst at Macquarie Securities Ltd, who has an "outperform" rating on the stock. "The future may look good for them as well, if they can continue to buy land in China at a low cost."
Hang Lung's shares rose 0.9 percent to HK$23.80 at the trading break in Hong Kong yesterday, before earnings were announced. The stock slid 33 percent this year, more than the 31-percent decline of the six-member Hang Seng Property Index.