Hong Kong Land - 31st May 2016
Hongkong Land Group
Hongkong Land is a listed leading property investment, management and development
group. Founded in 1889, Hongkong Land’s business is built on excellence, integrity and
partnership.
The Group owns and manages almost 800,000 sq. m. of prime office and luxury retail
property in key Asian cities, principally in Hong Kong and Singapore. Hongkong Land’s
properties attract the world’s foremost companies and luxury brands.
Its Hong Kong Central portfolio represents some 450,000 sq. m. of prime property. It has
a further 165,000 sq. m. of prestigious office space in Singapore mainly held through joint
ventures, and a 50% interest in a leading office complex in Central Jakarta. The Group also
has a number of high quality residential and mixed-use projects under development in cities
across Greater China and Southeast Asia, including a luxury retail centre at Wangfujing in
Beijing. In Singapore, its subsidiary,
MCL Land, is a well-established residential developer.
Hongkong Land Holdings Limited is incorporated in Bermuda and has a standard listing on
the London Stock Exchange as its primary listing, with secondary listings in Bermuda and
Singapore. The Group’s assets and investments are managed from Hong Kong by
Hongkong Land Limited. Hongkong Land is a member of the Jardine Matheson Group.
RELATED PARTY TRANSACTIONS :
The parent company of the Group is Jardine Strategic Holdings Limited and the ultimate
holding company is Jardine Matheson Holdings Limited (‘JMH’).
Both companies are
incorporated in Bermuda.
In the normal course of business, the Group has entered into a variety of transactions
with the subsidiaries, associates and joint ventures of JMH (‘Jardine Matheson group
members’). The more significant of these transactions are described below:
Management fee
The management fee payable by the Group, under an agreement entered into in 1995,
to Jardine Matheson Limited (‘JML’) in 2015 was US$4.5 million (2014: US$4.7 million),
being 0.5% per annum of the Group’s underlying profit in consideration for
management consultancy services provided by JML, a wholly-owned subsidiary of JMH.
Property and other services
The Group rented properties to Jardine Matheson group members. Gross rents on such
properties in 2015 amounted to US$19.1 million (2014: US$19.0 million).
The Group provided consultancy services to Jardine Matheson group members in 2015
amounting to US$0.4 million (2014: US$0.4 million).
Jardine Matheson group members provided property construction, maintenance and
other services to the Group in 2015 in aggregate amounting to US$50.7 million
(2014: US$30.6 million).
Hotel management services
Jardine Matheson group members provided hotel management services to the Group in
2015 amounted to US$2.8 million (2014: US$3.2 million).
Outstanding balances with associates and joint ventures
Amounts of outstanding balances with associates and joint ventures are included in
debtors and creditors as appropriate. The amounts are not material.
Highlights
Sound result in 2015
Continued strong performance from commercial portfolio
Entry into Shanghai with prime mixed-use site
Stable asset values
PERFORMANCE
Underlying profit attributable to shareholders was US$905 million, a 3% decrease
from 2014. Taking into account the net non-trading gains of US$1,107 million
recorded principally on property valuations of the Group’s investment properties, the
profit attributable to shareholders for the year was US$2,012 million. This compares
to US$1,327 million in 2014, which included net valuation gains of US$397 million.
The
net asset value per share at 31st December 2015 was US$12.19, compared with
US$11.71 at the end of 2014.
The Directors are recommending a
final dividend of US¢13.00 per share,
providing a
total dividend for the year of US¢19.00 per share, unchanged from the previous year
EPS of about 85.50 cents.
Current price of US$6.04 is about almost 50% of the NAV of US$12.19 .
PE of about 7.06 times.
I think it will be quite a good price to consider to accumulate if the price goes below $5.90 that may present a good long term value investment ...
(trade base on your own decision)
