Hong Kong tycoon Li Ka-shing's conglomerate Hutchison Whampoa Ltd. could post a sharp decline in net profit for the first half of the year due to lower gains from asset sales, analysts say.
Net income for the six months ended June 30 could have dropped more than 70 percent to HK$8.6 billion (US$1.1 billion) compared with HK$28.76 billion in the same period last year, according to forecasts from Daiwa Institute of Research in Hong Kong.
Billionaire Li's sprawling conglomerate, which runs retail, property, energy, infrastructure and telecom businesses, is scheduled to report its earnings Thursday along with his property flagship, Cheung Kong (Holdings) Ltd.
A year ago, Hutchison Whampoa's earnings were helped by a disposable gain of HK$35.82 billion (US$4.6 billion), booked after its telecom unit, Hutchison Telecommunications International Ltd., sold off Indian mobile phone assets.
Underlying profits, meanwhile, are expected to rise thanks in part to healthy growth in the company's established businesses despite rocky economic conditions, analysts say.
Its Canada-listed affiliate Husky Energy Inc. should benefit from higher oil prices and a joint-venture deal with BP PLC. Contributions from its port operations could increase about 7 percent or more, while losses from 3 Group, Hutchison's third-generation mobile business, have narrowed.
"We expect a strong turnaround," Daiwa analyst Jonas Kan said in a research note.
For its part, Cheung Kong is expected to post earnings of around HK$6.2 billion (US$798 million) in the first half, according to Adrian Ngan Wai-hung of CCB International Securities.
That would represent a steep fall from the year-ago period, when the company recorded HK$18.54 billion in profit.
Shares in both companies have tumbled along with Hong Kong's market this year, with Hutchison down more than 20 percent and Cheung Kong off over 29 percent.
