Douglas Woo attends Wheelock’s interim result at Landmark Mandarin Oriental in Central in August 2017.
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Wharf Holdings said on Thursday that its underlying profit fell 12% to HK$2.24 billion ($285 million), while warning of the negative effects of the trade war and real estate price controls on the mainland.
The Hong Kong-listed property developer has more than 100 billion yuan ($14.2 billion) of its assets in mainland China, and they contribute about 80% of its earnings. The company reported that its profit attributable to shareholders for the first half declined by 14% to HK$2.45 billion.
Wharf said that it had been “prudent” in China, and did not make any new land purchases for nearly one year, as the government’s control on primary sales pricing “seriously affects future project profitability.”
The company also stated that the profound impact of the roller-coaster U.S.-China trade war is affecting both the mainland China and Hong Kong economies. It also pointed out China’s currency weakened in the first half by 0.4% against Hong Kong dollar, which is pegged to the U.S. dollar, and faces continued uncertainty.
In Hong Kong, consumer demand has been weakened by “travel advisories, economic slowdown, contracting exports/re-exports, falling retail sales, stock market jitters and the threat to employment,” Wharf said in its filing. Hong Kong is entering its ninth week of widespread protests that were sparked by a proposed bill that would allow criminal suspects to be extradited to China.
But Stephen Ng, chairman and managing director of Wharf, expressed his confidence during a press briefing that the prices of super luxury housing (properties priced over HK$100 million) in Hong Kong will remain firm because the supply is so low.
Billionaire Peter Woo is the former chairman of Wheelock & Co., and its main subsidiary is Wharf. Wheelock and Wharf control telecom, port and retailing assets, including luxury department store chain Lane Crawford. Woo’s net worth is currently estimated at $10.1 billion. His son Douglas became the chairman of Wheelock in January 2014.
In response to recent political unrest in Hong Kong, Wheelock co-signed a statement by Hong Kong’s Real Estate Developers Association yesterday. The group condemned the escalating violence and expressed its hopes that Hong Kong may regain peace and order as soon as possible.
Peter Woo at his office in Tsim Sha Tsui in August 2014.
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