Wharf Holdings' core net profit up 22% to $7.2b

Driven largely by strong contributions from the property segment.

Profit attributable to shareholders grew 26% yoy to HK$8,441m in 1H17 on the back of big revaluation gains of the group’s IP portfolio (HK$1,171m in 1H17 compared with HK$525m in 1H16), according to UOB Kay Hian.

"Revenue dropped 15% yoy to HK$17,063m, while core net profit grew 22% yoy to HK$7,271m, driven by strong contributions from the property development segment (mostly from projects in China) and contributions from associates and JV (mainly from the Mount Nicholson project in Hong Kong). The results are in line with expectations, representing 52% of full-year forecast," the analyst added.

Here's more from UOB Kay Hian:

Wharf’s rental income grew 5% yoy, with 89% of its rental income generated from Hong Kong. Retail revenue of Wharf’s Hong Kong shopping mall in 1H17 grew 3% yoy. The retail sales decline at Harbour City/Times Square has stabilised from -5.3%/-6.7% yoy in 2H16 to 2.8%/-4.3% yoy in 1H17.

In comparison, HK retail market saw a decline of 0.6% yoy. We believe that unless HK’s retail industry significantly recovers, there will be limited upside potential for Wharf’s HK investment property business in 2H17.