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Public company info - Allied Properties (HK) Ltd. , 00056.HK
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Allied Properties (HK) Ltd., 00056.HK - Company Profile
Chairman Arthur George Dew
Share Issued (share) 6,812,000,000
Par Currency
Par Value 0.0
Industry Other Financials
Corporate Profile Business Summary: The Group has the following operating segments: 1.Investment and finance – investment and provision of mortgage loan and term loan financing. 2.Consumer finance – provision of consumer SME and other financing. 3.Property sales, property rental, hotel operations and management services – property sales, property rental, hotel operations managed by third parties and provision of management services. Performance for the year: The revenue of the Group for the year from continuing operations was HK$4,735.9 million (2018: HK$4,585.2 million). The profit attributable to the owners of the Company for the year (including continuing and discontinued operations) was HK$2,880.3 million (2018: HK$2,343.4 million), an increase of HK$536.9 million. Basic earnings per share amounted to HK42.28 cents (2018: HK34.40 cents). Business Review Properties Hong Kong The Group’s rental income from its Hong Kong property portfolio was maintained at a similar level to that of 2018. In 2019, the net gain in the value of the Group’s property portfolio, including investment properties owned by SHK, was HK$112.1 million (2018: HK$756.5 million). The hotel division reported a decrease in average room rates and occupancies due to the decrease in tourists in Hong Kong arising from the city protests in the second half of 2019, resulting in a decreased contribution. Allied Kajima Limited, the Group’s 50% joint venture holding various properties including Allied Kajima Building, Novotel Century Hong Kong hotel, Sofitel Philippine Plaza Hotel and the Wanchai Jaffe Road hotel redevelopment, recorded a profit decrease of 72.5% mainly due to a lower fair value gain in its property portfolio during the year and the reduction in the profit contribution from Novotel Century Hong Kong hotel, as its performance in second half year of 2019 was affected by the social protests. Superstructure work on the Jaffe Road hotel site is in progress. The construction of the hotel is expected to be completed in 2021. Mainland PRC The profit attributable to the owners of TACI was HK$1,345.9 million (2018: HK$1,251.2 million). The increase in profit of TACI was mainly due to an increase in the share of results of its joint ventures which was partially off-set by a decrease in recognised sales for completed properties and a decrease in fair vale gains in respect of its investment properties. There is a total of 16 cyberparks over 12 cities. The overall contribution of TACI’s cyberpark unit has increased. Those cyberparks on the Pearl River Delta have been contributing most and TACI will concentrate on developing new cyberparks and urban renewal projects in this region where it has ample manpower and marketing resources. Phase 2 Part 1 and Part 2 of TACI’s urban renewal project, Tian An Cloud Park, in Huawei New City Area in the Longgang District of Shenzhen, with gross floor area (“GFA”) of approximately 456,100 m2 was completed in 2019 and the remaining part of Phase 2 with GFA of approximately 143,300 m2 was completed in March 2020. Asiasec Properties Limited, the listed subsidiary of TACI, reported a profit attributable to its shareholders of HK$58.0 million (2018: HK$112.7 million). Financial Services Investment and Finance The profit attributable to owners of SHK was HK$2,085.2 million (2018: HK$1,183.8 million). SHK’s investment management division provided a pre-tax contribution of HK$1,083.2 million (2018: HK$83.2 million) to its earnings. SHK’s specialty finance business, which provides tailored funding solutions to corporates, investment funds and high net worth individuals, reported a pre-tax contribution of HK$64.8 million (2018: HK$241.7 million). The gross loan balance reduced from HK$2.6 billion as at 2018 to HK$2.1 billion at the end of 2019, as a result of repayments of outstanding loans and fewer new loans made in 2019. A conservative approach was adopted in credit approval considering the adverse impact on the economy from the US-China trade disputes and social unrest in Hong Kong. Sun Hung Kai Credit Limited made a pre-tax contribution of HK$121.4 million (2018: HK$114.1 million), a 6% year of year increase. Its gross loan balance was HK$3.6 billion at the end of 2019 (2018: HK$3.9 billion). Consumer Finance Profit attributable to owners of UAF for the year amounted to HK$1,057.8 million (2018: HK$1,000.4 million). During the year, UAF’s operation in mainland China continued to adopt a cautious approach. Focus was on lowering operating costs by reducing manpower and branch network as well as a conservative lending approach. UAF China will continue to develop its credit scoring system to enhance efficiencies and improve the credit quality of its loan portfolio. The social unrest in Hong Kong and the prolonged US-China trade dispute weighed on the performance of the Hong Kong economy in the second half of 2019. As a result, UAF Hong Kong was adversely impacted by higher charges for expected credit losses. However, the negative impact on contribution was partly mitigated by increased revenue from the growth in the loan portfolio. At the end of the year, the consolidated consumer finance gross loan balance amounted to HK$11.1 billion, representing an increase of 7% from the end of 2018. During the year, 16 branches in mainland China were closed. As at the end of 2019, UAF has 30 branches operating in 15 mainland China cities and 48 branches in Hong Kong. In June 2019, UAF completed the repurchase of its ordinary shares from ORIX Asia Capital Limited, a then minority shareholder which held 7.27% of the then issued ordinary shares of UAF, at a cash consideration of JPY10 billion. As a result, SHK’s beneficial interest in UAF increased from 58% to 63%. The repurchase has been earnings accretive for the Group. Investments At end of 2019, the Group held a 37.56% interest in APAC. Share of results of APAC for 2019 amounted to a profit of HK$302.2 million (2018: loss of HK$132.9 million). The profits contributed by APAC mainly comprised unrealised gains from fair value changes of its financial investments and reversal of impairment loss on interests in its associates. During the year, the Group has disposed of its entire interests in AP Elderly Care Limited to Allied Services, an indirectly wholly-owned subsidiary of AGL at a consideration of HK$260.0 million. The principal activities of AP Elderly Care Limited and its subsidiaries are provision of property management services and elderly care services. The disposal was completed on 17th December, 2019 and the gain on disposal was HK$82.7 million. Prospects: As a result of the protracted trade dispute between USA and China and the city protests in Hong Kong during the second half of 2019, the local economy faced a down turn and the property market was affected adversely. Moreover the outbreak of Coronavirus disease (COVID-19) in 2020 has now affected many countries. Cross border travel restrictions, significant disruption to China’s manufacturing capability and global supply chain, and a decline in worldwide tourism and consumer consumption resulted in a significant pressure to the global economy as well as local economy. The World Health Organization has recently declared the Coronavirus disease a pandemic. It is difficult to estimate how long before the Coronavirus spread can be contained by various countries. The Group believes that it will take some time for the global economy and local economy to recover and the full impact is not yet known. Under the current situation, the Board expects the Group’s core recurring income will be affected in 2020. The investment management business of SHK has felt the impact of the falling markets after a strong 2019 and been actively managing the investment portfolio through these difficult market conditions. SHK will continue to assess the market and utilise its extensive networks to seek out opportunities. The consumer and business lending business of UAF was immediately impacted by the Coronavirus outbreak in mainland China. Several UAF branches in mainland China were closed in accordance with quarantine measures and business was disrupted. At this time mainland China is only starting to resume business and the total impact on the business and loan book is not yet known. UAF believes that the initiatives to move more of the business online and reduce the physical branches and total staff mitigated some of the impact and may position the business for a quicker recovery through the remainder of 2020. For the Hong Kong business of UAF, UAF remains cautious as the economy has been affected by social unrest in the second half of 2019 even before the recent Coronavirus outbreak. The impact on business from the travel bans and social distancing orders could likely produce increased unemployment which in turn could affect credit quality of consumer finance loans. There are initial indications that delinquencies are starting to rise and loan origination has slowed. UAF remains confident in its capability and capacity to weather these challenges and will continue to closely monitor the development of the situation and adjust strategies as needed. With the outbreak of Coronavirus, vacancy rates of residential, commercial and retail sectors of the local property market will definitely increase and the rental rates will suffer. The Group expects the local property market will face a downward pressures in 2020. The mainland property market is expected to be weak in the short term due to the spread of Coronavirus. When the spread of Coronavirus slows down, it is expected that the property market should stabilise. There is no doubt 2020 will be a challenging year but with the Group’s solid financial position and diversified income streams, the Board will continue to adopt a prudent approach in implementing the Group’s stated strategies for the benefit of the Group and all its shareholders.

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