| Cheung Kong (Holdings) Ltd. 00001.HK |
| Company Profile |
| Chairman | LI Ka-shing | |
| Share Issued (share) | 2,316M | |
| Par Currency | HKD | |
| Par Value | 0.5 | |
| Industry | Property (HK & Macau) | |
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| Corporate Profile | Business Summary:
The principal activities of the Company are investment holding and project management. Its subsidiaries are active in the field of property development and investment, hotel and serviced suite operation, property and project management, and investment in infrastructure business and securities.
Performance for the year:
PROFIT FOR THE YEAR
The Group’s audited profit attributable to shareholders for the year ended 31st December, 2012 amounted to HK$32,152 million (2011 – HK$46,055 million). Earnings per share were HK$13.88 (2011 – HK$19.88).
Business Review:
Property Sales
Turnover of property sales for the year, including share of property sales of jointly controlled entities, was HK$26,521 million (2011 – HK$38,143 million), a decrease of HK$11,622 million when compared with last year, and comprised mainly the sale of residential units of two property projects completed last year – Festival City Phase 3 in Hong Kong and The Greenwich Phase 1C in Beijing, and the sale of residential units of property projects completed during the year, including Crown by the Sea, Le Chateau and La Splendeur in Hong Kong, Century Place Phase 1 and Le Sommet Phases 1B, 2 and 4A in Shenzhen, Cape Coral Phase 3A in Guangzhou, The Harbourfront Land No. 1 in Qingdao, The Greenwich Phases 2A, 2B and 3A in Xian, Regency Garden Phase 1 in Shanghai, Regency Park Phase 2 in Changzhou, The Metropolitan Tianjin Phase 2 in Tianjin, Cape Coral Phase 2A and Noble Hills Phase 2B in Chongqing, Laguna Verona Phases D1a, D1b1 and G1a in Dongguan and a few others on the Mainland.
Contribution from property sales, including share of results of jointly controlled entities, was HK$10,004 million (2011 – HK$11,218 million), a decrease of HK$1,214 million when compared with last year. During the year, residential property prices in Hong Kong maintained their rising trend on the back of solid demand from end users and tougher measures were introduced by the Hong Kong government to curb the residential property market; whereas sale of residential properties on the Mainland showed signs of recovery in a number of cities in the second half year.
Contribution from property sales for 2013 will mainly be derived from the sale of residential units of The Beaumount, One West Kowloon and Kennedy Park at Central in Hong Kong, Marina Bay Suites in Singapore, La Grande Ville Phase 2 in Beijing, Le Parc Phases 4A, 4B and 6B in Chengdu, Cape Coral Phase 3B in Guangzhou, The Harbourfront Land No. 2 and 8 in Qingdao, Laguna Verona Phases D1b2, D1c and G1a in Dongguan and several other property projects scheduled for completion.
The presales of residential units of The Beaumount, One West Kowloon and Kennedy Park at Central have been launched in Hong Kong and over 95% of all the units of these projects have been presold. The sale/presale of residential units of Marina Bay Suites in Singapore and various property projects on the Mainland are also progressing well.
Property Rental
Turnover of the Group’s property rental for the year was HK$1,867 million (2011 – HK$1,377 million), an increase of HK$490 million when compared with last year, mainly due to increasing rental rates for retail properties in Hong Kong as demand for retail properties continued to be driven by growing tourist and domestic spending. The Group’s investment properties comprise mainly retail shopping malls and commercial office properties in Hong Kong, which accounted for approximately 56% and 35% respectively of the turnover of the Group’s property rental for the year.
Contribution from the Group’s property rental was HK$1,703 million (2011 – HK$1,274 million), an increase of HK$429 million when compared with last year, mainly attributable to an increase in contribution from the Group’s retail shopping malls in Hong Kong. Property rental contribution from jointly controlled entities was HK$275 million (2011 – HK$424 million), a decrease of HK$149 million when compared with last year due to the fact that Oriental Plaza in Beijing no longer provides rental contribution after its listing on the Hong Kong Stock Exchange in April 2011. Overall contribution from property rental, including share of results of jointly controlled entities, amounted to HK$1,978 million (2011 – HK$1,698 million), an increase of HK$280 million when compared with last year.
In December 2012, Marina Bay Financial Centre Tower 3, an investment property completed in Singapore and of which the Group’s 16.7% interest was held through jointly controlled entities, was divested and the Group shared a surplus of HK$1,326 million arising from loss of control of indirect interest in the jointly controlled entities.
At the year end date, the Group accounted for an increase in fair value of investment properties of HK$4,470 million (2011 – HK$4,010 million) based on a professional valuation and shared an increase in fair value of investment properties of HK$531 million (2011 – HK$1,151 million) of jointly controlled entities.
Hotels and Serviced Suites
Turnover of the Group’s hotels and serviced suites for the year was HK$2,350 million (2011 – HK$2,489 million), a decrease of HK$139 million when compared with last year. The decrease in turnover was mainly due to the Group’s disposal of a 70% interest in Sheraton Shenyang Lido Hotel on the Mainland in January 2012. The disposal contributed a surplus of HK$1,077 million to group profit for the year.
Contribution from the Group’s hotels and serviced suites was HK$930 million (2011 – HK$916 million) and contribution including share of results of jointly controlled entities was HK$1,235 million (2011 – HK$1,188 million), an overall increase of HK$47 million when compared with last year, notwithstanding a decrease in contribution from Sheraton Shenyang Lido Hotel, now owned by a jointly controlled entity, as a result of the Group’s reduced interest in the hotel. During the year, local business travel and inbound tourism continued to be active and operating results reported by most of the hotels and serviced suites owned by the Group and jointly controlled entities in Hong Kong and on the Mainland were satisfactory.
During the second half year, the Group’s interest in a jointly controlled entity which owned the Metropark Lido Hotel, Beijing on the Mainland was disposed of at a profit of HK$450 million. In February 2013, The Apex Horizon owned and operated by the Group in Hong Kong was also disposed of to investors in the public. These transactions will have no significant impact on the overall contribution from the Group’s hotel and serviced suite operation in 2013.
Although global economic recovery is slowly underway with uncertainties ahead, the Group will strive for satisfactory results for its hotel and serviced suite operation.
Property and Project Management
Turnover of the Group’s property and project management for the year was HK$368 million (2011 – HK$350 million), of which income from property management was HK$171 million (2011 – HK$161 million), an increase of HK$10 million when compared with last year, and income from project related services was HK$197 million (2011 – HK$189 million), an increase of HK$8 million when compared with last year.
Contribution from the Group’s property management was HK$109 million (2011 – HK$105 million), an increase of HK$4 million when compared with last year, while the Group’s project related services made a small contribution to group profit. The Group also shared the profits of jointly controlled entities amounting to HK$45 million (2011 – HK$17 million), which were engaged in the management of major property projects, including Beijing Oriental Plaza on the Mainland and Marina Bay Financial Centre in Singapore.
The Group is committed to providing high quality services to properties under The Group’s management. At the year end date, the total floor area under the Group’s property management was approximately 87 million square feet and this is expected to grow steadily following the gradual completion of the Group’s property projects in the years ahead.
Major Associates
The Hutchison Whampoa Group, a listed associate, reported profit attributable to shareholders for the year ended 31st December, 2012 of HK$26,128 million (2011 – HK$56,019 million, including a net gain of HK$32,868 million on disposal of investments and others, mainly from the IPO of Hutchison Port Holdings Trust).
The CK Life Sciences Group, another listed associate, reported profit attributable to shareholders for the year ended 31st December, 2012 of HK$176.3 million (2011 – HK$125.8 million).
Prospects:
As compared to last year, global market conditions will likely turn more stable in 2013. However, many challenges and uncertainties will continue. While some improvement has been seen in the U.S. economic outlook, the global economic outlook remains fragile as the uncertainties in the Eurozone economies continue to weigh on the pace of global recovery.
China continued to experience strong economic growth. For 2012 as a whole, real GDP growth was 7.8%, moderately above the growth target of 7.5%. In 2013, China’s growth momentum is expected to continue as the Central Government has reaffirmed a proactive fiscal and prudent monetary policy with particular emphasis on quality and efficient economic growth, long-term sustainability, and urbanisation. Hong Kong is expected to stay on track to achieve modest economic growth this year, leveraging the strength of its healthy economic fundamentals as well as China’s sustainable development. The Group remain optimistic about the long-term economic prospects for the Mainland and Hong Kong.
The global geopolitical and economic landscape is ever changing and there will be many challenges ahead. The Cheung Kong Group has been presented with numerous investment opportunities and options, and continues to maintain a low debt ratio. The Group will continue with The Group’s strategy of “Growth with Stability”. The Group will vigilantly strengthen its core business and operations with a view to undertaking steady progress in a constantly challenging market. The Group will be agile in seizing investment opportunities for long-term growth. The Group will also achieve new growth through the continued pursuit of quality investments both in Hong Kong and abroad to create further value for shareholders. The Cheung Kong Group is poised for a solid performance in 2013. The Group are strongly confident in the Cheung Kong Group’s business prospects. |
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