This article first appeared on GuruFocus .
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Total Income:HKD5.5 billion, up 28.4% year on year.
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EBIT:HKD2.7 billion, a 50.1% increase year on year.
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Attributable Profit:HKD1.6 billion, more than a threefold increase year on year.
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Alternative Solutions AUM:HKD24.6 billion, up 56.7%.
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Investment Assets:HKD15.7 billion, increased by 18.9%.
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Consumer Finance Loan Book:HKD11.8 billion, up 6% year on year.
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Return on Assets:Improved by 11.9 percentage points to 15.1%.
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Private Equity Profit Before Tax:HKD1.3 billion.
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Consumer Finance Pretax Profit:HKD794 million, adjusted to HKD890.9 million excluding exchange loss.
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Cost-to-Income Ratio:Improved by 10 basis points to 31.1%.
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Net Debt:Decreased by 12.8% to HKD5.8 billion.
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Shareholders' Equity:Increased by 5.6% to HKD22.3 billion.
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Net Gearing Ratio:Reduced from 31.2% to 25.8%.
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Dividend Per Share:Total of HKD0.27 for 2025, up 3.8% year on year.
Release Date: March 20, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Sun Hung Kai & Co Ltd ( SHGKY ) reported a significant increase in total income by 28.4% year on year to HKD5.5 billion.
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The company's EBIT rose by 50.1% to HKD2.7 billion, indicating strong operational performance.
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The Alternative Solutions business saw a rapid scale-up with total AUM rising 56.7% to HKD24.6 billion.
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Investment Management business delivered a profit before tax of HKD1.8 billion, with a notable improvement in return on assets to 15.1%.
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The Consumer Finance business recorded a stable performance with a pretax profit of HKD794 million, and a 4.4% year-on-year increase in adjusted pretax contribution.
Negative Points
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The company faced higher operating and reorganizational costs associated with platform optimization in the Alternative Solutions business.
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There was an exchange loss of HKD97.4 million from the liquidation of Mainland China subsidiaries.
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The loan charge-off ratio for the Consumer Finance business increased by 20 basis points to 6.9%.
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The mortgage loan business recorded a year-on-year reduction in pretax profit due to cautious new loan originations and prudent provisioning policy.
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Despite strong performance, the company anticipates more market volatility and challenges in the macro environment.
Q & A Highlights
Q: Profit before tax from the investment management business increased significantly in 2025. What drove this performance? And is it sustainable? What does the exit pipeline look like for 2026? A: Brendan Mcgraw, CFO, explained that the main driver was significant listings in North America due to decreased interest rates and increased share valuations. This trend is expected to continue into 2026, assuming market normalization. Antony Edwards, Deputy CEO, added that the investment portfolio's 16.3% annualized IRR since 2010 reflects the systematic nature of their investment teams, suggesting strong repeatability and consistency in returns.
Q: What were the key growth drivers for the Alternative Solutions business in 2025? Is there any AUM target for 2026? Where do you expect fee income to come from, and are there new partnerships or seeding projects in the pipeline? A: Antony Edwards highlighted that the growth was driven by delivering good risk returns to third-party capital through co-investment deals and investment partnerships. The business aims to continue investing in capabilities to provide returns for both principals and external shareholders. New partnerships and projects are in the pipeline, including collaborations with ActusRay Partners, Wentworth Capital, and Mubadala Capital.
Q: What are the longer-term strategies for the investment management business? Is there any update for the dividend payout policy? A: Brendan Mcgraw stated that the long-term strategy is to generate strong risk-adjusted returns through discipline and good execution. Regarding the dividend policy, the Board will continue to monitor business results to determine future dividends, following an increase in light of good results.
Q: What is the asset quality of your legacy private credit loans? Do you have any new loans made by your special situations in Structured Credit and real estate segment? What is the outlook of these two business segments in terms of funding sources, asset quality, and risk management? A: Brendan Mcgraw assured that the asset quality is strong due to thorough underwriting and targeted private credit deals. New loans were made in 2025 with good asset strength. The outlook remains stable, with flexibility to capitalize on market dislocations. Antony Edwards emphasized their focus on loans with significant real asset backing for downside protection.
Q: Do you have any AI-related PE public market investments in your portfolio? If so, what percentage do they make up in Sun Hung Kai & Co? A: Brendan Mcgraw confirmed the presence of AI-related investments, though the exact percentage was not disclosed. The company invests in both software and subsidiary angles like energy demand, recognizing the broader effects of AI adoption.
Q: How have you been deploying AI across your business? A: Brendan Mcgraw explained that they have adopted an enterprise AI approach, deploying a large-scale platform accessible to all staff. This approach ensures cybersecurity while allowing AI tools to gather and process external intelligence, leading to productivity benefits.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
