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Thursday, July 28, 2016, 17:07

Hang Lung H1 profit jumps 27%

By Reuters

HONG KONG - Hong Kong developer Hang Lung Properties Ltd said its underlying first-half profit jumped 27 percent per share, driven by higher residential property sales despite the city's broader economy being hit by slowing growth in the Chinese mainland.

Hang Lung, the first of the territory's closely watched developers to report earnings for the half, said on Thursday it earned HK$3.17 billion (US$409 million) in underlying net profit in the half year ended June 30, or HK$0.70 per share, up from HK$0.55 per share in the same period a year earlier.

Property-related businesses account for almost a fifth of the Hong Kong economy, making their earnings bellwether reports for the territory.

Revenue rose 37 percent to HK$6.31 billion from HK$4.61 billion in the same period last year, Hang Lung said. Much of the boost came from the sale of 226 residential properties at The Long Beach development in Kowloon.

Hang Lung's strong half showed it had succeeded in sidestepping some market weakness. Hong Kong government data shows that overall property sales in the territory fell by almost 40 percent in both volume and value in the first half of the year.

But Hang Lung's commercial leasing business didn't perform nearly as well, and as of the end of June, it still had 446 completed units of The Long Beach to sell. It said on Thursday that it doesn't rule out harder times ahead.

"Both mainland China and Hong Kong will continue to face the challenges posed by slow economic growth and weak retail consumption sentiment" in the second half of the year, it said in a statement. Britain's June 23 vote to leave the European Union had also added to economic uncertainty, it said.

Hang Lung's shares closed up 1.8 percent while the benchmark index ended 0.2 percent lower.

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