Hopewell Holdings' core net profit dropped 11% to HKD590m

But strong rental growth seen in the next 2 years.

According to Maybank Kim Eng, HHL announced interim results after market close yesterday. Core net profit of HKD590m was 11% lower YoY, accounting for 48% of its previous FY6/13F estimate of HKD1,242m.

Maybank adds, the 10% YoY growth in rental income was offset by a 10% drop in infrastructure turnover, resulting in the top line falling 6% YoY. The interim DPS of HKD0.45 is unchanged from previous period, putting the core payout ratio at 67% from 60% in 1H6/12A. 

Here's more:

The results are largely in line with our expectations. We expect that asset enhancements and a reshuffling of tenants at major investment properties will support rental growth of 12% p.a. over the next two years.

Rental income from the Hopewell Centre rose 13% YoY for the period thanks to a 10% hike in average spot rent (of HKD42.4 psf) from an improving tenant mix.

For projects on sale, we expect that Lee Tung Street development will be launched in 2nd half of this year, with aggregate attributable revenue of HKD5.5b. The Huadu, Guangzhou project is expected to contribute 55k (336 units) and 151k sqm (896 units) in the next two financial years.