Henderson Land's First-Half Result in Line; Stronger Residential Booking Expected in Second Half

Henderson Land Development’s first-half result was within expectations. Underlying profit was HKD 7.80 billion compared with HKD 5.10 billion in the same period last year. Lower revenue and profit for property development was mainly due to the timing of booking. Contracted sales not yet recognised total HKD 29.80 billion at the end of the first half. Management noted half is expected to be recognised in the second half of this year. Our fiscal 2021 forecasts imply HKD 16 billion in property development in the second half. The more important recurring revenue from investment properties offset lower property development revenue while share of profit from Hong Kong and China Gas was strong. A first-half dividend of HKD 0.50 is in line with the same period last year. Our fair value estimate of HKD 43.20 is unchanged.