Sun Hung Kai Properties Shares Fall After Drop in Earnings

By Sherry Qin

Sun Hung Kai Properties' shares plunged early Monday after it reported a fall in its fiscal 2023 net profit.

Sun Hung Kai's shares declined 10% to 79.40 Hong Kong dollars, their largest intraday fall since September 2021, in first day of trading after the company reported weaker-than-expected fiscal year 2023 earnings. Hong Kong Stock Exchange was closed on Friday due to a black rain warning.

Sun Hung Kai, Hong Kong's largest property developer, said Thursday after the market closed that its fiscal 2023 net profit was 23.91 billion Hong Kong dollars (US$3.05 billion), compared with HK$25.56 billion the year before, mainly due to a decline in profit from property sales.

Jefferies analysts downgraded their rating on the developer's stock to neutral from buy and cut their target price to HK$80.00 from HK$115.00 as its sold but unbooked balance indicated it would only see a modest recovery in its development projects.

Meanwhile, the company's guidance for a 40%-50% payout ratio in fiscal 2024 from around 60% earlier implies a cut to its dividends next year, Jefferies said.

However, Citi analyst Ken Yeung said in a research note expects the property developer to deliver steady performance in its contracted sales due as it has sufficient land bank while rental income would likely increase with the help of new projects in fiscal 2024.

Citi maintained a buy call on Sun Hung Kai but lowered its target price to HK$103.30 from HK$127.90 to reflect a prolonged negative outlook on the Hong Kong property market.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

September 10, 2023 23:18 ET (03:18 GMT)

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