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Result preview: lower development earnings expected

1HFY22 underlying profit expected to fall 48% partly due to lower development earnings

Poggibonsi and IL PICCO should provide the mainstay of development profit

Conversion of West Gate Tower in Cheung Sha Wan into commercial use

HKR international will announce 1HFY22 results on 17 Nov. We forecast its underlying earnings to be 48% lower at HK$307m primarily driven by lower development profit and as its 1HFY21 earnings were boosted by gains on deregistration of subsidiaries. Yet, we estimate its interim DPS to remain unchanged at HK$0.04.

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We forecast its development earnings to fall 43% to HK$278m, which came from inventory sales of Poggibonsi in Discovery Bay and profit from selling three houses at IL PICCO. Gross rental receipts should be slightly lower partly due to the income shortfall from West Gate Tower in Cheung Sha Wan which was under usage conversion. 

Key things to watch out for include dividend paid, earnings growth of HKRI Taikoo Hui in Shanghai, project launch pipeline in Hong Kong and China for 2022, new investment plan, amongst others.