August 2, 2018 / 10:25 AM / 2 years ago

UPDATE 1-HK developer CK Asset H1 profit up 65 pct, but cautious on trade tensions

* Jan-June net profit at $3.15 bln, revenue down 19 pct

* Says growing trade tensions would “inevitably” hit Hong Kong

* Shares down 2.6 pct to lowest in over a year (Adds chairman’s quotes, details)

By Venus Wu

HONG KONG, Aug 2 (Reuters) - Hong Kong property developer CK Asset Holdings Ltd on Thursday reported a 65 percent rise in first-half net profit, thanks to new businesses and commercial property sales, but gave a cautious outlook ahead amid growing trade tensions.

Intensifying trade frictions between the United States and China would “inevitably” impact Hong Kong, it warned.

In its first earnings release since its founder, billionaire Li Ka-shing, handed over the reins of his business empire to his son Victor Li in May, CK Asset posted a net profit of HK$24.75 billion ($3.15 billion) for the six months ended June against a revised HK$14.98 billion a year ago.

The company, which also has interests in aircraft leasing, infrastructure and utility assets, said revenue fell 19 percent to HK$24.1 billion.

Li Ka-shing, 90, Hong Kong’s richest man, announced his retirement in March and officially stepped down in May, taking the role of senior advisor in both CK Asset and sister conglomerate CK Hutchison.

“As escalating international trade tensions unfold, this uncertainty adds to the concern of the unclear Brexit outcome and accelerated tightening in certain nations,” Chairman Victor Li said in a statement to the Hong Kong stock exchange.

“Despite these challenges, the fundamentals for global growth should remain solid and a cautiously optimistic outlook is expected for the second half year.”

CK Asset said first-half earnings also reflected gains from two major asset sales.

The company completed the sale in January of a 50 percent stake in a joint venture for the development of Shanghai’s Century Link commercial complex with a profit of HK$6.99 billion.

It also disposed in May its 73-storey office tower, The Center, recognising a surplus of HK$11.6 billion over its carrying value.

CK Asset’s shares dropped 8.8 percent in the first six months this year. Ahead of the results, the shares closed down 2.6 percent to the lowest in more than a year.

Since taking over from his father, Victor Li has expanded CK Asset’s overseas portfolio when he bought a London office tower for 1 billion pounds ($1.31 billion) in June.

He is also set to redevelop one of the company’s flagship commercial buildings in Hong Kong, Hutchison House, which was built in 1974, two years after Li Ka-shing first listed his company.

The 23-storey tower in the prime Central district, often cited as the world’s most expensive office market, neighbours a record-breaking commercial site in Hong Kong.

Just a stone’s throw away, its competitor Henderson Land Development paid a record HK$50,000 per square foot last year for a former car park site to develop an office building. ($1 = 7.8490 Hong Kong dollars) ($1 = 0.7645 pounds) (Reporting by Venus Wu Editing by Manolo Serapio Jr.)

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