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Wharf posts HK$3.12b Q3 profit

Earnings more than double on higher rental income from office and retail properties

(HONG KONG) Wharf Holdings Ltd, the Hong Kong landlord and port operator that owns a pay-television company, more than doubled its third-quarter profit as rental income from office and retail properties rose.

Net income for the three months ended Sept 30 rose to HK$3.12 billion (S$578 million) from HK$1.21 billion a year earlier. Profit in the first nine months of the year was HK$7.55 billion, or HK$3.08 a share, compared with HK

$7.47 billion, or HK$3.05, in the same period in 2006, Wharf said yesterday in a statement to Hong Kong’s stock exchange.

Wharf is investing in Chinese property to tap wealth in the world’s fastest-growing major economy as it seeks to diversify from Hong Kong. Rental profit from the group’s Hong Kong commercial properties, which accounts for 70 per cent of total assets, surged 20 per cent in the first nine months compared with a year earlier.

‘Wharf is a relative latecomer in the China market compared with its peers,’ said Kenny Tang, a research director at Hong Kong-based Tung Tai Securities Ltd. ‘Key for them will be whether they can at least catch up with the big boys in the second-tier cities, where they have been very aggressive in acquiring land.’ The quarterly figures were derived by Bloomberg News by subtracting first-half profit from the nine-month profit released by the company yesterday.

Wharf plans to increase its land bank in China to 100 million square feet, from 70 million square feet now, according to the statement. The company is competing against other Hong Kong developers including Henderson Land Development Co and Cheung Kong Holdings Ltd in acquiring property in the country.

The company, a unit of Hong Kong-listed developer Wheelock & Co, said it will boost investment in China, seeking a 50-50 weighting in assets between the mainland and Hong Kong in the next five years.

The company has bought 14 sites in China since the middle of 2005, it said.

Wharf and its subsidiaries have acquired at least 10 development sites in Chinese cities including Chengdu, Hangzhou and Chongqing between August and November, it said in yesterday’s statement.

Earlier this month the company bought land in the southwestern Chinese city of Chongqing for 7.5 billion yuan (S$1.46 billion) through a public tender held by the city’s municipal government. The project will be jointly developed with China Overseas Land & Investment Ltd.

In October, Harbour Center Development Ltd, a Hong Kong- listed subsidiary, and its partner bought land in Suzhou, a city west of Shanghai.

Wharf currently operates several commercial properties in the country including the Beijing Capital Times Square, Shanghai Times Square and the Chongqing Time Square.

Excluding property revaluation gains, nine-month net income rose 30 per cent to HK$4.02 billion, Wharf said.

Wharf jumped 5.1 per cent to HK$40.55 at the 4pm close in Hong Kong, the biggest daily gain in almost a month.

The stock earlier climbed as much as 7.9 per cent.

Wheelock, the property developer controlled by the family of Hong Kong billionaire Peter Woo, said profit in the six months ended September rose 8 per cent to HK$4.03 billion, with sales gaining 67 per cent to HK$13.9 billion, according to a statement to Hong Kong’s stock exchange today. Its shares surged 8 per cent to HK$24.30.


Source: Bloomberg (Business Times 29 Nov 07)


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