Sun Hung Kai & Co Announces 2017 Interim Results
Attributable Profit 2.8x of First Half 2016
Sun Hung Kai & Co. Limited (SEHK: 86) (the "Company", together with its subsidiaries, the "Group") delivered commendable results for the first six months of 2017. Profit attributable to owners of the Company for the six months ended 30 June 2017 was HK$780.1 million, 2.8x of HK$276.2 million for the same period last year.
The two largest contributors, Consumer Finance and Principal Investments, both performed well. Profit from the Mortgage Loans business under Sun Hung Kai Credit Limited ("Sun Hung Kai Credit") has also contributed to the overall growth.
Group Executive Chairman Mr Lee Seng Huang said, "Since 2015, the Group has been actively repositioning its capital across diverse and complementary finance and investment businesses. I am pleased that the initial results have been encouraging."
2017 Interim Results Summary
|For the 6-month period ending
||30 Jun 2017
||30 Jun 2016
|Profit attributable to owners of the Company
|Book value per share (HK$)
|Earnings per share (HK cents)
|Interim dividend (HK cents)
Business Segment Highlights:
- Operated under United Asia Finance Limited ("UAF").
- Profit before tax increased 2.3x to HK$623.2 million, mainly driven by the 67% decline in total bad debts expenses.
- The Mainland China business restructuring was completed during the period. Cost savings were achieved by the closure of underperforming branches and an increase in online business. The increased proportion of loans to individual customers led to a steady improvement in credit quality.
- UAF China will maintain exposure to SME customers selectively, with the same credit and diversification strategy as adopted for individual customers. The "UAF POS Loan" (天天富"亚联财POS贷) platform was jointly launched with China UnionPay Merchant Service Ltd to offer loan products to the 6.5 million SME users of the UnionPay POS terminals.
- UAF China obtained a national internet loan license, and the business launch is being planned for the second half of the year. Online channel expansion will be an important strategy going forward to expand our business in a cost efficient manner.
- Segment assets amounted to HK$12,194.8 million (31 December 2016: HK$10,845.1 million), with 5.9% six-month return on the average assets deployed. The segment contributed HK$432.3 million to pre-tax profit, compared to HK$12.4 million in the last period.
- The segment assets are invested across equities (46%), debt and fixed income (38%) and real estate (17%). All the strategies contributed positively to the bottom line.
- Our investment in WuXi PharmaTech (Cayman) Inc. was valued to 2.5x cost following the growth in its business and the successful listing of one of its subsidiaries, WuXi Biologics (Cayman) Inc. This is an example of a co-investment opportunity brought by our partner funds.
- In the private equity portfolio, we have invested in companies involving a total sum of HK$374 million during the period, including Social Finance, Inc., Fairstone Financial Inc. (formerly CitiFinancial Canada), as well as GEvent Financial Services, China. These investments manifest our competencies in the financial services sector and our ability to explore new synergies with investee companies.
- During its 21 months in operation, Sun Hung Kai Credit has passed a significant milestone, with the loan portfolio surpassing the HK$1 billion mark, and was ranked the top non-bank mortgage provider in terms of the number of new loans originated for first mortgages.
- Mortgage Loans contributed HK$12.3 million to pre-tax profit, compared to a start-up loss for the first half of 2016.
- First mortgage was an important source of growth, accounting for 78% of the loan portfolio. Sun Hung Kai Credit expanded marketing channels from print media and branches to online, and new alliances with developers and real estate agents.
- Pre-tax contribution from this segment was significant at HK$61.9 million (first half 2016: HK$98.4 million). The decline was mainly due to the lower net accounting gain from our 30% stake in Sun Hung Kai Financial Holdings Limited ("SHK Financial")
- SHK Financial has out-performed the market turnover growth during the period with a healthy increase in revenue from wealth management products as well as client asset growth, with total assets reaching approximately HK$100 billion.
- LSS Financial Leasing (Shanghai) Limited (40% shareholding) successfully expanded its business lines from corporate to consumer auto leasing. A strategic collaborative platform was formed with its other shareholders, Brilliance China Group and 58.com to offer a total solution to entrepreneurial drivers entering the on-demand delivery business.
- End -
About Sun Hung Kai & Co. Limited
Sun Hung Kai & Co. Limited (the "Group") is an investment and finance firm with a focus on Greater China.
Since its foundation in 1969, the Group has owned and operated market-leading businesses in financial services, striving to generate long-term capital growth for its shareholders. Leveraging on its heritage and operational experience, the Group invests across a diverse yet complementary portfolio of investment and finance businesses. Through online platforms as well as an extensive branch and office network across Hong Kong and Mainland China, the finance business provides funding solutions to individuals, small businesses and corporates.
The Group currently has about HK$19 billion* in shareholders' equity. It is the major shareholder of leading consumer finance firm United Asia Finance Limited and a substantial shareholder of Sun Hung Kai Financial Group Limited.
*As of 30 June 2017.
For more information about Sun Hung Kai & Co. Limited (SEHK: 86), please visit its website at www.shkco.com.
For enquiries, please contact:
Nancy Chen (852) 3748 2823 email@example.com
15/08/2017 Dissemination of a Financial Press Release, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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