Annual Report Insights | Discounted "Bottom Fishing" Becomes a Double-Edged Sword: Cheung Kong Property Sales Revenue Doubles, Profits Under Pressure

How do AI discount promotions affect CK Asset’s profitability?

Last year, a series of discount promotional strategies resulted in CK Asset delivering a “higher revenue but not higher profit” performance.

Recently, CK Asset released its 2025 financial report, showing revenue of HKD 57.935 billion, a 27.25% increase year-on-year; pre-revaluation profit from investment properties was HKD 11.96 billion, with earnings per share of HKD 3.42, up 2.7% from the previous year. After accounting for the impact of investment property revaluation, CK Asset’s attributable profit for 2025 was HKD 10.847 billion, with EPS of HKD 3.1, a 20.3% decrease compared to the previous year.

In terms of property sales, CK Asset’s sales doubled to HKD 20.449 billion last year, but property sales revenue was only HKD 2.733 billion, a mere 19.34% increase year-on-year. So, why did CK Asset fall into a “higher revenue but not higher profit” situation?

CK Asset 2025 Financial Report Screenshot

Discount Promotions Put Pressure on Property Revenue

Looking at property sales, last year CK Asset launched a series of discount promotions in Hong Kong and Mainland China. While these effectively cleared inventory, they compressed profit margins.

Breaking down the HKD 2.733 billion in property sales revenue, Mainland China contributed HKD 1.756 billion, nearly quadrupling year-on-year; Hong Kong only contributed HKD 375 million, a 76.69% decline.

From a revenue perspective, the Hong Kong market’s contribution dropped by over 70%. CK Asset stated that this was mainly due to previous discounts offered during a weak market to boost sales, and provisions made for losses on Blue Coast and Blue Coast II sales.

Comparison of sales revenue over the past two years. CK Asset 2025 Financial Report Screenshot

It is known that these two projects were sold at discounts in 2024. At that time, the average launch price was about HKD 21,900 per square foot, roughly 70% of surrounding second-hand prices, and about 78% of the cost of approximately HKD 28,000 per square foot, representing a 22% discount. This sales strategy was called “bottom-price hunting” and quickly made the Blue Coast project a popular new development in Hong Kong, enabling rapid sales.

Meanwhile, in Mainland China, CK Asset has also been offering discounts in recent years. In July last year, to attract Hong Kong residents to buy property in the north, CK Asset’s subsidiary Hutchison Properties launched the “Greater Bay Area Dual Living” plan, promoting four projects in the Guangdong-Hong Kong-Macau Greater Bay Area, including Huizhou Longpo Garden, Zhongshan Longpo Garden, Guangzhou Yicui Manor, and Dongguan Haiyi Haoting, totaling 400 units, with prices starting as low as HKD 400,000.

These heavily discounted properties quickly stirred the local market. For example, at Huizhou Longpo Garden, public information shows that a 51-square-meter one-bedroom unit previously priced at HKD 10,400–14,000 per square meter now sells for only HKD 443,000, roughly HKD 8,632 per square meter, a significant drop. The villas at Dongguan Haiyi Haoting also saw prices plummet from HKD 44,000–68,000 per square meter in May 2023 to HKD 18,000–36,000 per square meter in June 2025, nearly halving.

Not only in the Greater Bay Area, but in Beijing too, CK Asset’s luxury project “Yucui Garden” in Chaoyang District’s East Fourth Ring Road adopted price cuts when it launched last year. Public info shows that in July 2023, 473 units received pre-sale permits, with high-rise apartments averaging around HKD 98,000 per square meter, and townhouses around HKD 91,000 per square meter. The project was launched in three phases—initially at full price with limited sales, then at 75% of original price with better absorption, and finally at 70% in May last year before halting promotions due to low prices.

Unlike Hong Kong projects, CK Asset’s Mainland projects, acquired early and developed slowly, still have ample profit margins even when sold at discounts. For example, the Yucui Garden site was acquired by Hutchison Whampoa in 2001 for HKD 700 million, with a floor price of only HKD 1,750 per square meter.

“As long as the return is reasonable, we will participate in land bidding”

Regarding the outlook for Hong Kong’s property market this year, CK Asset management said at an earnings briefing that as Hong Kong’s economy stabilizes, residential property transactions are gradually recovering. “The government’s reduction of stamp duty, low mortgage rates, and developers adjusting prices make it more attractive for citizens to enter the market, supporting the overall residential property market.” Based on this, CK Asset plans to launch a series of new projects this year.

When asked about continuing land acquisitions in Hong Kong, Li Zeju, chairman and managing director of CK Asset and son of Li Ka-shing, responded that as long as the return is reasonable, they will participate. “When bidding or making acquisitions, the group always adheres to ‘financial discipline’ and does not have a ‘must-win’ mentality. We will not chase prices blindly; ultimately, return on investment is what matters.”

By the end of 2025, CK Asset’s land bank (including developer rights for joint ventures but excluding farmland and completed properties) totals about 6.5 million square feet, with 5.6 million in Mainland China, 600,000 in Hong Kong, and 300,000 overseas.

Currently, CK Asset holds HKD 41.7 billion in cash. When asked about investment plans, Li Zeju said the group will continue focusing on countries with strong legal systems and long-term stable cash flows, “If there are high-quality projects meeting our IRR (internal rate of return) requirements, we are generally interested. The key is the project’s profitability and the required investment.”

On diversification, after exiting Panama ports and selling UK power assets, Li Zeju revealed a breakthrough in oil business: “After acquiring MEG, Cenovus’s daily oil production has approached 1 million barrels, exceeding many oil-producing countries.”

Regarding recent asset sales, Li Zeju responded at the earnings briefing, “The company’s financial health is very strong, and there is no pressure to sell assets.”

Beijing News Shell Finance Reporter Xu Qian

Editor Yang Juanjuan

Proofreader Wang Xin