Kerry Properties (683) H1 2025 earnings summary

Executive summary

• Combined revenue rose 65% year-over-year to HK$9,954 million, driven by strong property sales in Hong Kong and the Mainland, especially from the Jinling project in Shanghai and Mont Verra and La Montagne in Hong Kong, but underlying profit fell 30% to HK$978 million due to lower margins, reduced rental revenue, higher taxes, and increased costs.

• Profit attributable to shareholders declined 22% to HK$612 million, with EPS at HK$0.42 and adjusted EPS at HK$0.67.

• Interim dividend per share maintained at HK$0.40.

• Contracted sales surged 130% year-over-year to HK$16,186 million, mainly from Mainland projects such as Shanghai Jinling Residences.

• Residential prices in Hong Kong are stabilizing with modest improvement in transaction volumes, but inventory overhang and weak economic indicators persist.

Financial highlights

• Combined revenue increased 65% year-over-year to HK$9,954 million, with property sales up 176% and rental/hotel revenue down 5%.

• Gross margin declined from 45% to 27% due to product mix and reduced rental revenue.

• Reported profit attributable to shareholders decreased 22% to HK$612 million; underlying profit fell 30% to HK$978 million.

• Net finance costs increased to HK$331 million (+70% YoY); taxation rose to HK$609 million (+35% YoY).

• Gearing ratio improved to 38.4% from 41.5% at year-end 2024.

Outlook and guidance

• Management maintains a positive long-term view on Hong Kong and Mainland economies but expects near-term headwinds and market volatility.

• Focus remains on prudent landbanking, financial discipline, resilience, and sustainable growth amid economic repositioning in the Mainland.