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Hong Kong property
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Property developer K Wah’s profit falls by more than half as Hong Kong’s higher interest rates sour market

  • Firm’s profit attributable to equity holders falls by about 55 per cent, revenue slumps by 42 per cent
  • Dividend of HK$0.07 per share to be paid on October 26

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Hong Kong’s Kowloon peninsula. It ‘is well positioned to prudently capture any opportunities in Hong Kong and the mainland’, K Wah says. Photo: Elson Li
Cheryl Arcibal
K Wah International Holdings, the property developer owned by one of Macau’s biggest casino owners, said its first-half profit declined by more than half after Hong Kong’s elevated interest rates dampened demand for homes.
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Its profit attributable to equity holders fell about 55.4 per cent to HK$481.9 million (US$61.5 million), while revenue slumped by 42 per cent to HK$3.1 billion, according to a filing with the Hong Kong stock exchange on Wednesday.

“Despite the government relaxing measures on certain loan-to-value ratios on mortgages, the longer-than-expected US interest rate hike cycle, with interest rates up to a record high since 2001, and the rise in Hong Kong mortgage rates caused both transactions and transaction prices to adjust downwards from May,” the company said in a statement. The high interest rates are, however, expected to peak and fall next year, in line with US interest rate movement, it added.

The developer, which is owned by Lui Che-woo – the seventh-wealthiest man in Hong Kong with a net worth estimated at HK$13.6 billion by Forbes magazine – has projects in Hong Kong and mainland China. Lui is also the chairman of Galaxy Entertainment Group, whose properties in Macau include Starworld Hotel and Galaxy Macau.
Lui Che-woo, K Wah’s owner, is the seventh-wealthiest man in Hong Kong with a net worth estimated at HK$13.6 billion by Forbes magazine. Photo: Bloomberg
Lui Che-woo, K Wah’s owner, is the seventh-wealthiest man in Hong Kong with a net worth estimated at HK$13.6 billion by Forbes magazine. Photo: Bloomberg
K Wah also holds 162 million shares of Galaxy Entertainment, representing a 3.72 per cent interest in the casino operator.
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China’s pivot away from its zero-Covid policy and the reopening of its borders in January “was initially expected to be a strong catalyst to reactivate the economic activities of the mainland, which could also boost global economic growth, and of Hong Kong. Nevertheless, the mainland and Hong Kong economic momentum weakened going into the second quarter”, K Wah said in its statement.

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