Hong Kong Infrastructure Report Q4 2009: Industry Report

Hong Kong Infrastructure Report Q4 2009

Product Type: Market Research Report
Published by: Business Monitor International
Published: October 2009
Product Code: R302-8339

Description

We have revised our forecasts this quarter to a slightly more bearish prognosis for 2009. We now predictthat the construction sector in Hong Kong will undergo a contraction in real terms of 8.9% this year,compared with our earlier forecast of 7.3%. This is on the back of very poor data in the initial months ofthe year, particularly the first quarter. Private sector generated construction activity, in particular, faredvery badly.

However, we are now modestly more optimistic for 2010, predicting that real construction sector activitywill increase by 2.1% across the year, compared with our earlier expectation of 0.1%. Signs of a fasterthan-expected recovery in the territory’s economy - which appears to have reached an (admittedlyextremely deep) trough in Q109 - drive this more optimistic outlook. The construction sector should thengenerate positive growth throughout the rest of our forecast period, albeit at a modest rate, of between2.5% and 3.0% per year (2011-2013).

This quarter, we update our analysis of key infrastructure companies operating in Hong Kong to takeaccount of H109 results. Cheung Kong Infrastructure Holdings generated a 67% y-o-y increase in netprofit to HKD3.9bn in H109, boosted largely by the sale of significant assets in February. The sale wasthat of power plants in Jilin and Guangdong provinces for HKD5.7bn to Hong Kong Electric, a companythat CKI maintains a minority stake in. Revenues (net of divestitures) in H109 fell 30% y-o-y toHKD2.22bn from HKD3.18bn. CLP Holdings, meanwhile, generated a net income of HKD3.24bn inH109. Although this represented a significant decline from HKD5.61bn in H108, the performanceremains reasonable (if slightly below market expectations), given the significant global headwindscurrently buffeting the infrastructure sector. Sales fell 15% y-o-y to HKD23.5bn in H109.

Table of Contents

Executive Summary: SWOT Analysis; Hong Kong Infrastructure SWOT; Hong Kong Political SWOT; Hong Kong Economic SWOT; Hong Kong Business Environment SWOT; Market Overview; Global Overview; Governments To The Rescue: The Global Surge In Infrastructure Spending
Table: Infrastructure Stimulus Plans List: Major Infrastructure Developments And Key Projects; Transport Infrastructure Overview
Table: Transport: Recent And Historical Activity; Airports; Ports; Roads And Bridges; Railways; Energy And Utilities Infrastructure Overview; New And Ongoing Projects; Water; Construction Overview; Historical Activity; Residential Construction; Commercial Construction; Tourism Construction; Major Projects Summary
Table: Hong Kong - Major Infrastructure Projects - Transport
Table: Hong Kong - Major Infrastructure Projects - Energy And Utilities
Table: Hong Kong - Major Infrastructure Projects - Construction: Industry Forecast Scenario
Table: Economic And Construction Data Table: Business Environment
Table: Regional Infrastructure Business Environment Ratings: Limits Of Potential Returns; Risk To Realisation Of Returns; Project Finance Ratings: Outlook For Asia Pacific
Table: Design And Construction Rating
Table: Commissioning And Operating Rating
Table: Overall Project Finance Rating: Hong Kong’s Business Environment; Legal Framework; Labour Force; Foreign Direct Investment; Tax Regime; Macroeconomic Outlook
Table: Hong Kong - Economic Activity: Political Outlook; Company Monitor; Cheung Kong Infrastructure (CKI) Holdings
Table: CKI Global Portfolio: CLP Power Hong Kong

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