Company Reports

Henderson Land Development's, or HLD's, first-half underlying profit increased 66% year on year to HKD 5.1 billion, driven by strong property development project bookings and gains from government land resumptions. The interim dividend was unchanged at HKD 0.50 per share.

Henderson Land Development is one of Hong Kong's top four real estate developers by residential units sold and contracted sales. It also holds 9.8 million square feet of attributable gross floor area in its Hong Kong investment properties portfolio. Despite its strong presence across all sectors of Hong Kong real estate, it has limited signature projects.

Henderson Land Development is one of Hong Kong's top four real estate developers by residential units sold and contracted sales. It also holds 9.8 million square feet of attributable gross floor area in its Hong Kong investment properties portfolio. Despite its strong presence across all sectors of Hong Kong real estate, it has limited signature projects.

We transfer coverage of two of the Big Four developers in Hong Kong, Sun Hung Kai Properties, or SHKP, and Henderson Land Development, or HLD.

Henderson Land Development is a leading Hong Kong property developer. It ranks third in square footage in the retail sector and fourth in the office sector. In residential sales, HLD is usually one of the top-five developers by units sold and contracted sales. Despite its strong presence across all sectors of Hong Kong real estate, it has limited signature projects.

Henderson Land's 2025 underlying profit declined 38%, driven by lower investment property sales and gains from farmland resumptions, as well as weak property development margins. Full-year dividends were down 30% year on year to HKD 1.27 per share.

Hong Kong Land Registry data show that the year-to-November number of primary residential sales agreements reached 18,801, surpassing the full-year 2024 total. Improving buyer interest also drove the Centa-City Leading Index up around 4% year to date as of Dec. 7, 2025.

Henderson Land's first-half 2025 underlying profit (excluding fair value changes on investment properties) fell 44% year on year, due to lower contributions from its Hong Kong property development segment. The interim dividend remains unchanged at HKD 0.50 per share.

Henderson Land Development, or HLD, is a leading Hong Kong property developer. It ranks third in square footage in the retail sector, and fourth in the office sector. In residential sales, HLD is usually a top-five developer in terms of units sold and contracted sales. Despite its strong presence across all sectors of Hong Kong real estate, it has limited signature projects.

The one-month Hong Kong Interbank Offered Rate fell to 0.54% on June 16 from a high of 4.06% on April 29. According to CBRE, this brings effective mortgage rates below 2.4%, indicating a positive carry for most residential properties based on gross yield.

Henderson Land Development, or HLD, is a leading Hong Kong property developer. It ranks third in square footage in the retail sector, and fourth in the office sector. In residential sales, HLD is usually a top-five developer in terms of units sold and contracted sales. Despite its strong presence across all sectors of Hong Kong real estate, it has limited signature projects.

Henderson Land’s 2024 results were within our expectations. The group’s net profit fell 32% year on year to HKD 6.3 billion, driven by a higher attributable share of fair value loss on its completed investment properties and investment properties under development. Excluding the fair value changes, the group’s underlying profit rose 1% year on year. Dividend per share for 2024 is unchanged at HKD 1.80, in line with our expectation. The group is looking to launch 13 projects in 2025 and is optimistic that home sales will improve, especially in the second half of the year, given a more favorable interest-rate environment. However, we lower our fair value estimate to HKD 32 per share from HKD 34 after rolling our model and fine-tuning our assumptions. Our 2025-27 EPS forecasts are lowered by 2%-8% after cutting our margin assumptions, as we expect pricing pressure to remain in the near term given high supply in the residential market. Henderson Land remains our preferred pick for Hong Kong residential developers as it trades at an attractive 2025 dividend yield of 7.8%. We do not expect the passing of the founder Lee Shau Kee to have a huge impact on the business, as he had handed over the reins to his two sons in 2019.

We expect 2025 home transaction volume to continue to pick up from 2024’s growth of 16.7% (according to data from Hong Kong’s Land Registry) even as expectations on interest rate cuts moderate. Our preferred pick in the sector is Henderson Land, which trades at a 33% discount to our fair value estimate of HKD 34 per share and offers an attractive 2025 dividend yield of 8.2% currently, compared with Sun Hung Kai Properties' 5.6%. We also like its diversified recurring income stream generated by its investment properties portfolio and stable contribution from its utility associate.

Henderson Land’s first-half 2024 net profit fell 47% year on year to HKD 3,174 million, mainly weighed down by revaluation losses on its investment and development properties. Excluding these non-cash fair value losses, underlying profit declined by a narrower 10% year on year, in line with our expectation. The group also maintained its interim dividend per share of HKD 0.50, unchanged year on year. We leave our earnings estimates (after excluding revaluation changes) broadly the same and retained our fair value estimate of HKD 34 per share. We think the shares continue to screen as cheap, and we like Henderson Land for its strong exposure to the Northern Metropolis development project with its massive agricultural landbank.

Henderson Land Development, or HLD, is a leading Hong Kong property developer. It ranks third in square footage in the retail sector, and fourth in the office sector. In residential sales, HLD is usually a top-five developer in terms of units sold and contracted sales. Despite its strong presence across all sectors of Hong Kong real estate, it has limited signature projects.

We still see value in Hong Kong developers despite the recent slowdown in home sale transactions. Our preferred pick in the sector is Henderson Land, which trades at a 37% discount to our fair value estimate and offers an attractive 2024 dividend yield of 8.4% at the current price. We also like its diversified recurring income stream generated by its investment properties portfolio and stable contribution from its utility associate.

Henderson Land’s fiscal 2023 earnings per share, or EPS, of HKD 1.91 was slightly below our expectations due to lower gross margin and fair value losses on its investment properties. That said, the group kept its full-year dividend per share unchanged at HKD 1.80, in line with our expectation. The removal of property cooling measures in Hong Kong in March 2024 has been a huge positive for the group, and management said it sold 946 residential units in the three weeks since then, which is 60% of its total sales in 2023. Management will focus on sales volume for 2024, with plans to launch 12 development projects during the year. It also expects housing prices to remain soft, given the huge stock of unsold housing units in the market. Management’s views are in line with our views, and we expect home prices in Hong Kong to remain soft in the near term and bottom out in the second half of 2024 following expected rate cuts in the US. We retain our fair value estimate of HKD 34 per share after rolling our model and fine-tuning our assumptions. Our 2024 EPS forecast is lifted by 8% due to higher property sales in Hong Kong, while our 2025-26 EPS estimates remain largely unchanged. Henderson Land remains our preferred pick for Hong Kong residential developers as it trades at an attractive 7.8% dividend yield in 2024. We think the risk of a dividend cut is low, given the group's strong recurring income base.

Henderson Land Development, or HLD, is a leading Hong Kong property developer. It ranks third in square footage in the retail sector, and fourth in the office sector. In residential sales, HLD is usually a top-five developer in terms of units sold and contracted sales. Despite its strong presence across all sectors of Hong Kong real estate, it has limited signature projects.

The lowering of the stamp duty in Hong Kong has had a limited impact in reviving the residential market as housing prices continue to decline in the face of high interest rates and a weak economic outlook. According to the Rating and Valuation Department, the private residential price index fell to a seven-year low in November 2023, and we expect price weakness to persist through the first half of 2024. While interest rates have likely peaked, we think that housing prices will only find support in the second half of 2024. Our U.S. economist said he expects the Federal Reserve to start cutting rates in March 2024. We cut our fair value estimates for Henderson Land and Sun Hung Kai Properties to HKD 34 and HKD 115 from HKD 36 and HKD 128, respectively, after lowering our near-term assumptions on their Hong Kong development margins and sales.

Henderson Land Development, or HLD, is a leading Hong Kong property developer. It ranks third in square footage in the retail sector, and fourth in the office sector. In residential sales, HLD is usually a top-five developer in terms of units sold and contracted sales. Despite its strong presence across all sectors of Hong Kong real estate, it has limited signature projects.