SUN HUNG KAI & CO. LIMITED
The Group's profit attributable to owners of the Company amounted to HK$610.3 million, a solid increase over the same period in 2013 (HK$380.2 million). The rise was driven by an encouraging operating performance and strong gains from the Group's Principal Investments portfolio and treasury management. The Group's revenue increased by 16% to HK$2,511.7 million, with very strong year-on-year growth in Consumer Finance revenue from Mainland China operating under United Asia Finance Limited ("UAF"). Earnings per share for the six-month period was HK28.8 cents (first six months of 2013: HK17.8 cents) and the Board has declared an interim dividend of HK10 cents per share, in addition, a special dividend of HK2 cents per share was also declared to commemorate the Group's 45th anniversary.
Mr Lee Seng Huang, Group Executive Chairman, Sun Hung Kai & Co. Limited, said: "Despite the lacklustre markets, we maintained a solid operating performance for all of our major businesses. We continue to drive our growth through our measured expansion in China while maintaining a strict cost discipline."
The Mainland China loan business remained a key growth area. Revenue from Mainland China increased by 34% year-on-year, accounting for 33% of the Group's figures. Total interest income increased by 19% with growth in our loan books. Operating earnings before bad and doubtful debts increased at a healthy rate of 16%, in line with revenue growth.
UAF delivered satisfactory results for the first half of 2014 with solid growth in revenue and profit. Revenue rose by 20% and pre-tax profit contribution grew by 19% to HK$745 million. Operating earnings from the Mainland China loan business increased by 34% year-on-year. At the end of the period, the consolidated consumer finance loan balance amounted to HK$10.9 billion, representing
20% year-on-year growth. The Mainland China loan book accounted for 36% of the consolidated
gross balance. It increased 4.5% compared to the end of 2013, and 46% on a year-on-year basis. The total branch network in Mainland China and Hong Kong expanded to 165 outlets, including an additional 10 branches in Mainland China during the first half of 2014. In July 2014, UAF entered into a long-term strategic cooperation agreement with 58.com to develop internet financial services in Mainland China.
During the first half of 2014, despite a relatively quiet equities market, our Wealth Management and Brokerage division continued its transformation with commission from wealth management products experiencing a healthy increase of 8% and accounting for 45% of total commission income. Market neutral offerings including structured products and bonds performed particularly well, while delivering optimal investment diversification to our clients. Commission from brokerage products was affected by weaker market conditions and declined slightly by 6%. The Group's margin book and interest income enjoyed a steady increase providing a stable income base. The loan balance was HK$3,962 million at the end of June 2014, up 4% year-on-year, and this segment's interest income increased by 18%.
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Revenue from our Capital Markets division increased by 15% to HK$212.3 million and contribution to pre-tax profit amounted to HK$34 million (2013: HK$69.6 million). The decrease was mainly attributed to a HK$30 million mark-to-market loss during the period on financial instruments resulting from an equity-linked component in one of our loans on completion of the associated IPO. The structured finance business grew satisfactorily in the first half of 2014, and our term loan portfolio was HK$2,732.3 million at the end of June 2014, an increase of 16% from year-end 2013 (HK$2,356.6 million). Interest income amounted to HK$175.7 million, 17% higher than the corresponding period in 2013.
The Group's Principal Investments segment is involved in investments in financial instruments, direct investments in businesses and commercial real estate portfolio classified under portfolio investments and group management and support. Solid gains from this division were reported because of the continued appreciation of some investment properties as well as gains on the investment portfolio. During the period, the average value of the portfolio was HK$2,012.2 million. A Sale and Purchase Agreement has also been signed for the sale of our office space in Macau. Upon the completion of the transaction, a gain of HK$139 million before tax is expected to be reported in the second half of
2014.
As the Group celebrates its 45th anniversary, we are honoured to once again be recognised by Asiamoney, in its 25th Anniversary Poll of Polls Awards, as the "Best Local Brokerage - Hong Kong". As the Group continues its growth, it remains steadfast on its five guiding principles: Excellence, Integrity, Innovation, Prudence and Professionalism.
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About Sun Hung Kai & Co. Limited
Sun Hung Kai & Co. Limited (the "Group") is a leading financial services group specialising in wealth management, securities brokerage and consumer finance with an extensive branch and office network of over 180 locations across Hong Kong, Macau and Mainland China.
With its foundation dating back to 1969, the Group seeks to create long-term value for clients and shareholders through its business divisions: Wealth Management and Brokerage, Consumer Finance and Principal Investments. The Group's subsidiaries, including Sun Hung Kai Financial Limited and United Asia Finance Limited, provide a broad range of financial services to both retail and institutional clients. The Group currently has about HK$13.6 billion* in shareholders' equity. Further information is available at www.shkco.com.
* As of 30 June 2014
For enquiries: | ||
Juliana Chan | (852) 3920 2511 | juliana.chan@shkco.com |
Maggie Chan | (852) 3920 2513 | maggie.chan@shkco.com |
Rona Chau | (852) 3920 2509 | rona.chau@shkco.com |
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