Kerry Properties (683) H2 2025 earnings summary

Executive summary

• Combined revenue rose 17% year-over-year to HK$25,015 million, driven by a 28% increase in property sales, mainly from Hong Kong projects, and improved cash flow and gearing position.

• Underlying profit fell 22% year-over-year to HK$2,008 million due to softer office rental performance and higher tax charges, while reported profit attributable to shareholders increased 16% to HK$938 million.

• EPS increased 16% to HK$0.65, while adjusted EPS based on underlying profit declined 22% to HK$1.39.

• Dividend per share maintained at HK$1.35, with final dividend at HK$0.95 per share.

• Contracted sales surged 175% to HK$34,684 million, mainly from Shanghai Jinling Residences presales.

Financial highlights

• Gross margin declined to 27% from 32% due to lower rental revenue and higher fixed costs.

• Net debt decreased 18% to HK$39,671 million, with gearing ratio down to 33.3% from 41.5%.

• Cash and bank deposits increased to HK$16.1 billion, and undrawn bank loan facilities rose to HK$31.1 billion.

• Net finance costs rose to HK$714 million due to lower capitalised finance costs, despite a 17% drop in gross finance costs.

• Investment property portfolio valued at HK$87,199 million, with a non-cash fair value loss of HK$1,070 million recognized.

Outlook and guidance

• Prudent approach maintained amid uncertain timing of market stabilisation and demand recovery in the Chinese Mainland.

• Long-term optimism for both Hong Kong and Chinese Mainland, with Hong Kong benefiting from improved sentiment, lower interest rates, and increased foreign capital inflows.

• Chinese Mainland real estate sector remains challenged by oversupply and weak sentiment, but structural reforms and focus on quality growth are expected to support future stability.

• Prudent approach to financial management and selective investment in high-quality opportunities will continue.