Henderson Land's core net profit to climb 30% to HKD7.25b

More redevelopment projects lined up.

According to Maybank Kim Eng, it expects Henderson Land's  core net profit to grow 30% YoY to HKD7.25b vs the consensus estimate of HKD6.08-
15.02b (mean of HKD7.47b). It also expect a final DPS of HKD0.73 (FY11A: HKD0.70), which will bring full-year DPS to HKD1.05, up 5% YoY.

Here's more:

Property development revenue (mainly from The Gloucester, 39 Conduit Road and other remaining unit sales in FY12) may see a slight drop but this should be compensated by healthy growth (20% YoY) in HK and China rental income.

Henderson Land’s (HL) share price has corrected by as much as 20% since mid-January, reflecting market concerns over policy risks with regard to the residential and commercial property sectors.

A doubling of stamp duty introduced at the beginning of February and hike in mortgage interest rates in mid-March by major banks further dampened sentiment towards local developers. YTD, HL has fallen 11.3% and underperformed the market by 10.8ppts.

In our view, the market will focus on HL’s acquisition costs of existing buildings for redevelopment.

It currently has 37 urban redevelopment projects (80-100% ownership) with an attributable GFA of 2.88m sq ft. In addition, 48 other projects (majority ownership but below 80%) in 10 different urban districts are under negotiation with total attributable GFA expected at 5.29m sq ft.