Wharf Holdings jumps to 3-year high on talk of property spin-off

Hong Kong blue-chip Wharf Holdings jumped as much as 10 per cent on Friday after the company suggested it could reorganise its businesses, splitting out its flagship properties in the process.

Wharf said in its 2016 final results announcement that it had begun a study into separately listing some of the Group’s investment properties as “a simple segregation may provide investors with more and better choice.”

Its best-known developments are the vast Harbour City shopping mall in Kowloon, beloved of mainland Chinese shoppers, and the Times Square mall in the city’s shopping mecca of Causeway Bay.

A reorganisation could mirror that orchestrated in 2015 by Li Ka-shing, Hong Kong’s richest man, when he overhauled his ports-to-properties empire by spinning off the property assets and effectively merging his two main listed blue-chips Cheung Kong and Hutchison Whampoa. Wharf was tipped at the time to be next in line for a reshuffle.

Wharf reported core profit for 2016 increased by 25 per cent to HK$13.8bn ($1.7bn) as profit from its Hong Kong properties rose 35 per cent. Its investment properties contributed HK$8.8bn to core profit, up 6 per cent on 2015 and contributing nearly two-thirds of the total as occupancy levels remained high.

Wharf also announced it had ceased talks to sell Hong Kong pay-TV provider I-Cable and that it would halt funding to the loss-making subsidiary.

Shares were up 8.7 per cent at the morning session’s close on Friday, having risen as much as 10 per cent to HK$68.45, their highest level since May 2013. Hong Kong’s benchmark Hang Seng index was flat at lunchtime.