CK ASSET (01113) 2026 Interim Results: Financial Cash Flow Stable, Continuing to Operate with a Prudent Strategy.

On August 13, CK ASSET (01113) announced its interim results for the 2026 fiscal year, reporting revenues of HK$40.306 billion, a year-on-year increase of 58.77%. Shareholders' attributable profit was HK$8.683 billion, up 37.78% year-on-year, and an interim dividend of HK$0.41 per share was proposed. Group Chairman Li Zejiu stated in the performance report that the group has always adhered to a prudent principle, relying on a diversified and high-quality asset portfolio to operate its various businesses. He noted that Hong Kong's external trade performance has improved and local demand has increased, with the property market continuing to be influenced by housing land policies and interest rate trends. On the financial front, the group is solid, with different sources of recurring income. The sale of a UK joint venture generated a profit of HK$9.787 billion. After deducting bank and other loans, the group had a net cash balance of HK$21.9 billion as of the interim settlement date. As of the interim settlement date, the group's total bank and other borrowings amounted to HK$43.8 billion, down HK$7.6 billion from December 31, 2025. The repayment schedule is spread over 10 years: HK$10.1 billion is due within one year, HK$29 billion is due between two to five years, and HK$4.7 billion is due after five years. Regarding impairments, the group's fair value of real estate investment trusts and investment properties decreased by HK$255 million and HK$1.46 billion, respectively. The impairment for the associate company HUI XIAN REIT (087001) was HK$6.023 billion. Li Zejiu indicated in the performance report that the group operates under a prudent principle with financial strength, allowing it to flexibly respond to the changing business environment. The group will also prudently seek investment projects with potential and allocate funds at the appropriate time to create sustainable returns for shareholders. Furthermore, the group will continue to explore potential opportunities in Hong Kong and Mainland China. Speaking about the Mainland property market, Li Zejiu stated that China, as one of the world's largest economies, has made significant contributions to global growth. The country promotes technological innovation and the development of strategic emerging industries, continuously exploring new economic momentum while focusing on boosting domestic demand and facilitating global trade and investment. The central government is also dedicated to stabilizing the property market, successively launching various favorable policies in several key cities to consolidate market confidence and maintain steady growth in the real estate market. In the first half of the year, CK ASSET recorded substantial gains from the sale of UK assets, but the group did not declare a special dividend. CK ASSET's Accounting Department General Manager Wen Jiaqiang stated that the company's dividend policy is related to its financial performance and outlook. The board has not discussed the distribution of a special dividend, but believes that share buybacks are also one way to enhance long-term shareholder value. Regarding the outlook for the property market, Wen Jiaqiang pointed out that despite numerous factors affecting the real estate market and the economy, there has been robust growth in the market this year, both in terms of transactions and prices, especially in luxury homes. For instance, the selling price of the group's Po Lau Dao project has reached a new high, and general residential projects are supported by demand from both Hong Kong and Mainland China. However, any fluctuations in property prices or rising interest rates could slow down market trends. In terms of property sales, the confirmed property sales revenue for the first half of the year (including the share of joint ventures) was HK$21.618 billion (2025: HK$7.366 billion), primarily including sales from residential projects Blue Coast and Blue Coast II, which were completed in Hong Kong last year, as well as the sale of remaining units from several completed projects in Mainland China. The significant increase in property sales revenue in the first half of the year was mainly due to sales recognition from Blue Coast and Blue Coast II. However, for the first half of the year, even accounting for the provisions made in 2025 for the sales of Blue Coast and Blue Coast II, the revenue was still limited. CK ASSET's property development profit margin fell to 3.5% in the first half of the year. Wen Jiaqiang explained that the primary profit contributions came from Blue Coast and Blue Coast II, both of which had relatively high land cost prices, while the profit margin for the Po Lau Dao project remained healthy. In the office market, CK ASSET's Executive Committee and Finance Committee member and General Manager of Corporate Business Development Ma Lizhi stated that demand in the office market is good. The relatively low cost of the second phase of the Changjiang Center allows the group to wait patiently for a recovery in the Central leasing market. Currently, the sentiment in the Central market has improved, but it remains challenging outside Central. The group will closely monitor the impact of interest rate trends on the market. CK ASSET's Special Projects Director Zhao Rucheng stated that the current market is filled with uncertainties, and the group will approach both existing business and new investment opportunities with caution, make good use of cash, maintain financial discipline, continue to seek projects that can deliver stable operating cash flow, and explore investment opportunities, particularly in Hong Kong's real estate sector.