Sun Hung Kai Properties Limited

For the year ended June 2026, underlying profit was HK$22.9 billion, up 4.6% year on year. Reported profit was HK$21.4 billion, up 11.1% year on year. Underlying EPS was HK$7.89 and reported EPS was HK$7.39. The board recommended a final dividend of HK$2.93 per share, up from HK$2.80, bringing full-year DPS to HK$3.91 including the interim dividend of HK$0.98. Segment-wise, property development profit was about HK$8.3 billion, property rental net income was about HK$18.6 billion, hotel operating profit was HK$728 million versus HK$615 million a year earlier, and other businesses contributed about HK$4.6 billion. Total operating profit was HK$32.2 billion, broadly stable year on year. Net debt was HK$67.6 billion, gearing was 10.7% versus 13.5% in December, and interest cover was 8.5x versus 6x a year ago. Management said net finance costs fell 33% year on year. For Hong Kong property development, recognized profit was HK$4.6 billion, up 44%, with margin at 11%; including Dynasty Court and Shouson Peak, margin was 16%. About HK$22.8 billion of contracted sales remain unrecognized, including around HK$21 billion expected to be recognized in FY2027. Hong Kong contracted sales were about HK$38.1 billion in FY2026; management set a target of HK$33 billion for the next financial year. On the Mainland, recognized property sales were about HK$10 billion, operating profit was HK$3.7 billion, gross rental income was about HK$6.5 billion, and hotel revenue was HK$5.5 billion with operating profit of HK$728 million.

The executive team framed the year as one of continued growth despite a volatile external backdrop, emphasizing the company’s strong balance sheet and its ability to keep replenishing land bank when opportunities arise. Raymond Kwok highlighted large Hong Kong residential launches, the Tuen Mun A16 Station Package 2 win, and the push to build out Northern Metropolis and West Kowloon into long-duration growth platforms. His tone was confident and strategic, with repeated emphasis on landmark projects, integrated developments, and long-term city development.

Miriam Leung presented the numbers: underlying profit of HK$22.9 billion, reported profit of HK$21.4 billion, underlying EPS of HK$7.89, reported EPS of HK$7.39, and a final dividend of HK$2.93 per share. She also pointed to segment contributions, including Hong Kong property development profit of about HK$4.6 billion, rental income of about HK$18.6 billion, hotel operating profit of HK$728 million, and total operating profit of HK$32.2 billion. On the balance sheet, she cited net debt of HK$67.6 billion, gearing of 10.7%, interest cover of 8.5x, and a 33% decline in net finance costs year on year, while stressing prudent financial management and capacity for land acquisition.

Analysts focused on Hong Kong residential pricing, sales targets, margins, dividends, potential share issuance, West Kowloon leasing, capital recycling, Mainland sales and policy changes, and land lease renewal risk in China. Management said Hong Kong residential demand remains in an early recovery stage, with solid demand supported by lower inventories and inbound talent, but acknowledged that a 30%+ margin is unlikely in the current market and set HK development sales guidance at HK$33 billion for the next year. On capital allocation, they said dividend policy remains 40% to 50% of EPS and there is no plan for new shares, convertible bonds or warrants, citing low gearing. On Mainland policy changes, they said the new rules may slow cash collection and increase industry consolidation, but should favor financially strong developers and improve supply-demand balance; they also said they have no imminent land lease expiry issue and are taking a wait-and-see approach on renewal mechanisms.