Li Ka-shing, chairman of Cheung Kong (Holdings) Ltd and Hutchison Whampoa Limited, applauds at the two companies' joint annual results briefing in Hong Kong Tuesday. Cheung Kong's net profits for 2009 surged 53 percent to HK$19.9 billion thanks to a strong contribution from property sales of about HK$8.4 billion. Edmond Tang / China Daily

Developer's profits surge 53 percent to HK$19.9 billion on strong property sales

The Cheung Kong group has never been formally accused of hoarding land in the mainland in spite of its large property presence there, said chairman Li Ka-Shing, as the blue chip developer reported its annual results Tuesday.

Li, Hong Kong's richest man according to Forbes, said Cheung Kong has many projects in the mainland, many of which consist of tens of millions of square feet, but the firm has never been formally charged of loading.

"We build our projects as soon as we can, like the Oriental Plaza in Beijing," Li said. He said that building a large project phase by phase could make letting out the space easier, but that his firm would prefer to build on a large scale and swiftly.

He noted that good progress has been made by the group's property business on the mainland, adding that the group has confidence in its strong fundamentals and tremendous potential.

"We will actively prepare for further expansion by making prudent, selective investments in quality sites and projects on the mainland," Li said.

A subsidiary of PCCW, controlled by his younger son Richard Li, has recently been accused of hoarding land in Beijing, and has been banned from bidding at land auctions in the capital. But Li Ka-Shing declined to comment on the property affairs of PCCW.

However, the Cheung Kong chairman had plenty of reasons to smile about the real estate business of his own flagship developer.

The company's net profits for 2009 surged 53 percent to HK$19.9 billion, thanks to a strong contribution from property sales at about HK$8.4 billion. It is paying a final dividend of HK$2.7 per share.

Li said the group's property business in Hong Kong has benefited from the solid performance of the local property sector in 2009, when property transactions and prices were supported by a high level of affordability and the unwinding of pent-up demand.

"In view of the prevailing low interest-rate environment and the government's recent enhancement of the Application List System aimed at increasing the flexibility of land supply, the local property market is expected to remain stable and positive in the medium to longer term," he said.

His elder son, Vice Chairman Victor Li, said the local property market depends on supply and demand, and demand has always exceeded supply over the years. He said that this relationship will continue into the foreseeable future and that Cheung Kong is happy to sell more flats as the demand is strong.

Subsidiary Hutchison Whampoa, the conglomerate that is also chaired by Li, reported a 12 percent rise in net profits to HK$14.2 billion. It is paying a final dividend of HK$1.22 per share.

(HK Edition 03/31/2010 page2)