Wharf firms up balance sheet as Hong Kong home sales cushion profit slump

Wharf, a prominent developer in Hong Kong, is increasingly depending on the city's high-end residential market to counteract declining revenues from China's property sector. In the first half, the company's Hong Kong property revenue surged 185% to HK$1.35 billion, while operating profits nearly quintupled to HK$166 million. This marked a stark contrast to a 54% drop in revenue from mainland projects, where a HK$547 million impairment provision was recorded.

Despite the mainland market's challenges, Wharf's Hong Kong residential sector has seen "meaningful gains" in prices and transactions, though the company warns of potential headwinds due to tighter Chinese regulations on outbound capital. Chairman Stephen Ng noted that Hong Kong opportunities were proving more lucrative than the mainland, as Wharf has seen limited success in mainland investments since 2019.

To bolster its financial position, Wharf ended the half with HK$6.2 billion in net cash, up from HK$2 billion at the end of 2025. The increased liquidity enabled the company to maintain shareholder payouts despite weaker earnings, declaring a HK$0.40 interim dividend, double the payout from the previous year. Wharf plans to reinvest the cash in Hong Kong's property market, particularly in the Northern Metropolis.

However, the company's overall profit attributable to shareholders dropped 91% to HK$48 million, largely due to a rise in net revaluation deficit on investment properties to HK$2.05 billion. Operating profit in logistics, a non-property segment, also fell 19% to HK$111 million, amid challenges such as regional port competition and global trade disruptions.