K Wah aims to double its investment property portfolio

K Wah International aims to double its investment property portfolio to 200,000 square metres in the next three to four years in a bid to enhance its recurrent income after first-half profit sank 76 per cent to HK$214 million due to a sharp fall in property sales.

Excluding a HK$101.94 million revaluation gain on investment properties, the company's underlying profit for the six months to June was HK$129 million, far below Goldman Sachs' estimate of HK$377 million.

Turnover in K Wah, whose chairman is Lui Che-woo (pictured), dropped 77 per cent to HK$750 million, from HK$3.03 billion in the same period last year.

An interim dividend of 5 HK cents was declared.

"The lower than expected profit was mainly because of only one new project launch in Hong Kong in the first half," said Kay Ng, an analyst at Phillip Securities.

Ng expects to see an improvement in the company's sales in the second half of 2014 as more projects are due for launch in the coming months.

Herbert Hui, the chief financial officer at K Wah, said that three residential projects - in Shanghai, Guangzhou and Dongguan - would be released for sale in the second half, while two housing projects in Tseung Kwan O will be ready for pre-sale next year.