Deals
Sun Hung Kai Properties Sacrifices Margins to Sell More Units
- Bocom’s Lau says Sun Hung Kai margins fell by half to 20%
- Steep discounts, 120 percent mortgages hurt profit margins
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Sun Hung Kai Properties Ltd., Hong Kong’s biggest developer by market value, beat its residential sales target for the first half of the year, while sacrificing profit margins as it offered sweeteners to entice buyers.
Alfred Lau, a Hong Kong-based property analyst at Bocom International Holdings Co. who has a sell rating on the stock, estimates that the developer’s Hong Kong residential margins fell to about 20 percent in the first half of the year, from an average of 40 percent. Margins are a measure of profitability, typically showing what percentage of a company’s overall sales are retained in earnings.