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Sun Hung Kai Properties Ltd (SUHJY) is the largest Hong Kong real estate company by market capitalization, with substantial holdings in residential and commercial sectors.

The Kwok family is the controlling shareholder, with a stake of 48%. The Hong Kong operation contributes close to 80% to 90% of operating profit, including property trading and investments, hotels, telecommunication, and transport.

The China operation contributes 10% of operating profit and is expected to increase to 15% to 20% in the next five years.

The company was formerly known as Sun Hung Kai (Holdings) Limited and changed its name to Sun Hung Kai Properties Limited in March 1973.

The company was incorporated in 1972 and is based in Wan Chai, Hong Kong.

Three key data points gauge Sun Hung Kai Properties Ltd, or any dividend-paying firm.

The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.
 

SUHJY Price

Over the past year, Sun Hung Kai Properties Ltd share price increased about 2.4% from $12.01 to $12.30 as of Thursday’s market close.

If SUHJY stock trades in the range of $10.00 to $20.00 this next year, its recent $12.30 share price might rise to $13.00 by next year. Of course, SUHJY price could drop about the same $0.70 amount, or more.

My upside estimate of $0.70 is 2x above the average annual target price gain over the past 20 years.
 

SUHJY Dividend

Sun Hung Kai Properties Ltd ’s most recent $0.16  semi-annual dividend, paid March 23rd to shareholders of record March 8th, equates to $0.63 annually and throws a yield of 5.12% as of Thursday’s closing price.
 

SUHJY Returns

Adding the $0.63 anticipated annual dividend to SUHJY’s estimated $0.70 price upside reveals a $1.33 potential gross gain per share for the coming year.

At Thursday’s $12.30 closing price, a little under $1000 would buy 81 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.12 per share.

Subtracting that maybe $0.12 brokerage cost from my estimated $1.33 gross gain per share makes a net gain amounting to $1.21 X 81 shares = $98.01 for a 9.8% net gain.

This may be the time to pounce on SUHJY. But beware, its dividend is solid and its price has been rising, and is now priced $9.79 below the stock’s all-time high of $22.00 posted January 10, 2008.

The foregoing article is based on past history of Sun Hung Kai Properties Ltd. The only accurate measure of future performance is from active investment in the company.

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