Emperor's financial struggle mirrors the current state of Hong Kong's property sector
Emperor International Holdings' struggles reflect the highs and lows the city's property sector has endured over the past few years.
Advertisement
Just over five years ago, residential and commercial real estate prices and rents were hitting
record highs. Developers reported robust earnings and had access to cheap financing, boosting their confidence – and that of investors – to spend more on new projects or acquire existing income-generating properties.
But this golden era ended abruptly. Social unrest in 2019 and the Covid-19 pandemic that followed triggered an economic recession, reducing
demand for commercial property at a time when new projects were being launched. The downturn also coincided with a sharp rise in Hong Kong's interest rates, which were raised 11 times between March 2022 and July 2023 to over 5 per cent from 0.5 per cent, before falling slightly last year.
Emperor's full-year loss of HK$4.74 billion (US$600 million) for the year ended March 2025, more than double the HK$2.04 billion a year earlier, reveals the severity of the crisis facing the sector. The group, controlled by 82-year-old tycoon Albert Yeung Sau-shing, disclosed that bank borrowings totalling HK$16.6 billion were overdue and some associated loan covenants had been breached.
Albert Yeung, the founder and chairman of Emperor Group, pictured in December 2024. Photo: VCG/VCG via Getty Images
'The broad issues faced by Hong Kong developers in the current environment would be weak property valuation and soft earnings from poor sales,' said Xavier Lee, an equity analyst at Morningstar. Lee did not specifically comment on Emperor's predicament, but gave a general overview of the challenges developers face in the current environment.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
4 hours ago
- South China Morning Post
Huawei to open-source self-developed programming language Cangjie
Huawei Technologies is set to open-source its self-developed programming language, Cangjie, marking the latest step in the company's pursuit of technological self-sufficiency. First unveiled a year ago, Cangjie will be open-sourced and accessible to all developers starting July 30, Huawei announced during its annual developer conference in June. Open-sourcing allows public access to a software program's source code, enabling third-party developers to modify or share its design, fix issues, or expand its capabilities. This initiative reflects Huawei's ongoing efforts to reduce reliance on foreign software and other technologies amid tighter export restrictions from Washington. Cangjie, named after a legendary figure in Chinese mythology credited with inventing written Chinese characters, is designed for 'full-scenario intelligence', according to Huawei. It features native artificial intelligence (AI) capabilities and robust security, making it suitable for a wide range of applications, according to its official website. Huawei's smartphones are displayed at its flagship store in Beijing. Photo: Reuters The language primarily supports general programming for apps on HarmonyOS Next, a version of Huawei's cross-device operating system that is entirely independent of Android.
South China Morning Post
5 hours ago
- South China Morning Post
Number of semi-private schools seeking fee increases falls by 26% in Hong Kong
The number of Hong Kong semi-private schools applying for a tuition fee increase has dropped by more than a quarter against a year ago, with the sector attributing the decline partially to the sluggish economy. A spokesman for the Education Bureau said on Friday that as of June it had received 40 applications from schools belonging to the direct subsidy scheme (DSS) to adjust tuition fees upwards, a 26 per cent decrease from the 54 recorded last year. The number has not been this low since 2022. The number of schools notifying the bureau of an intent to freeze fees this September rose to 38, up from 25 last year, marking a 52 per cent increase. Dion Chen, chairman of the Direct Subsidy Scheme Schools Council, said the sluggish economy could be one reason for the schools' reluctance to raise fees. 'Like during the pandemic, most of the DSS schools did not raise school fees. And DSS schools would also study whether they have such a need and sufficient surplus before applying to raise the fees,' he said. About 470 preschools receiving subsidies and around 130 private ones have applied for a fee increase, marking a 10 per cent drop from the 660 recorded last year.
South China Morning Post
6 hours ago
- South China Morning Post
Could hi-tech China revive the US rust belt – and steady superpower ties?
China could draw on its innovation in advanced manufacturing to improve business – and overall – ties with the United States amid a fragile trade truce, according to a prominent American political scientist. Advertisement In an interview, Robert Pape, a professor at the University of Chicago, also said China could 'rise peacefully' to be the world's leading superpower through its strength in innovation if it continued 'moderate responses' to US President Donald Trump 's foreign policy – while America grappled with domestic fractures and a rise in political violence. Pape, who specialises in international security affairs, pointed to what he called the 'Wuhan model' – integrated university-industry clusters in second-tier Chinese cities that focus on advanced manufacturing, which he said opened up possibilities for reinvigorating rust-belt cities in the US. Political scientist Robert Pape visited some of China's biggest tech firms last month. Photo: LinkedIn 'They're integrating university research in private industry. But it's not just happening in Stanford and Silicon Valley or Harvard, MIT and the Boston area. This is happening in a second-tier city,' Pape said. He made the remarks after a 10-day trip to China last month when he visited some of the country's big tech firms in cities including Wuhan, Hangzhou and Shenzhen. Wuhan – capital of central Hubei province and home to a hi-tech manufacturing cluster known as Optics Valley – has traditionally been seen as a second-tier city but in recent years has moved into the ranks of the 'new first-tier cities' as its innovative and industrial strength has grown. Advertisement Pape's visit took place amid a temporary de-escalation of the US-China trade war following separate talks in Geneva and London in June.
