Hong Kong-listed property firms give overUS$2 billion to charitable causes, topping list of donors
China Evergrande Group was the biggestdonor last year, handing out HK$4.3 billion, some 5.7 per cent of its annualprofit, according to a study by Sodata Analytics Foundation Association
China Evergrande was the biggest donor among Hong Kong-listed propertycompanies last year. Photo: Reuters
Property and financial companies havetopped the list of donors among Hong Kong-listed firms for a second straightyear, according to a study by Sodata Analytics Foundation Association.
Property firms, led by mainland China-baseddevelopers, donated around HK$8.1 billion (US$1.03 billion) in 2018 and 2017respectively, followed by financial firms’ HK$3.6 billion in each of the pasttwo years, based on disclosures in their annual reports.
The average donation of the 220-odd realestate firms was HK$34.2 million each in 2018 versus HK$20 million forfinancial companies, according to the non-government organisation, which hasbeen tracking listed firms’ donations since 2013.
The association’s Sodata index, tracking100 firms that scored the highest on donations amount, growth rate andcontinuity, has gained 7 per cent since its debut on June 2, 2015 –outperforming the Hang Seng Index’s 5.5 per cent decline.
“Over the past three years, the highestranked 100 firms showed higher returns [for investors] and lower [share price]volatility,” said the association’s founder Michael Yip, who is also chieffinancial officer of Rising Glory Finance.
However, the Sodata index fell 2.9 per centyear to date, underperforming the Hang Seng’s 3.8 per cent gain.
Gabriel Wilson-Otto, head of Asia-Pacificstewardship at BNP Paribas Asset Management, said it is hard to show a reliablecorrelation between a company’s donations and its financial and share priceperformances.
“Companies with higher profitability willoften have more cash and more scope to make donations, while those facing costpressure and increasing competition may cut back on donations unless they givethem a competitive advantage or a social licence to operate,” he said.
“But this isn’t always the case; you couldhave a company that donates a certain sum every year that doesn’t [correspondwith] increased profitability, so there could potentially be some link but notnecessarily a strong correlation.”
Tencent Holdings donated HK$833 million. Photo: Reuters
The difference between donations and widermeasures of companies’ ESG (environment, social and governance) performance isthat the latter involves the examination of a wider scope of critical factorsrelating more concretely to companies’ operations, Wilson-Otto noted.
“Poor governance or an extreme human rightsor environmental violation can result in a company’s share price going to zero.Not giving donations to charity is unlikely to be the key factor that makes acompany go out of business.”
ESG funds, whose fund managers are mandatedto consider ESG factors on top of financial performance when making assetallocation decisions, are projected to grow by over US$20 trillion in assetvalues in the next two decades, according to Bank of America Merrill Lynch.
“A strategy of buying stocks that rank wellon ESG metrics would have outperformed the market by up to three percentagepoints per year over the last five years,” the bank’s strategists said in arecent report.
Li Ka-shing, Hong Kong’s richest man, has donated more than HK$25billion to charitable causes over the past several years. Photo: Sam Tsang
China Evergrande Group ranked first in thepast two years, according to Sodata’s study. It donated HK$4.3 billion lastyear – 5.7 per cent of its profit, and HK$5 billion in 2017 – 11.3 per cent ofprofit.
The Shenzhen-based property developer hadcommitted four years ago to donate 11 billion yuan (US$1.53 billion) towards apoverty alleviation plan it initiated for the Wumeng mountainous region nearBijie city in the impoverished Guizhou province in southwest China, its annualreport said.
Evergrande was followed by Foshan,Guangdong-based developer Country Garden Holdings, which donated HK$1.56billion last year, and Tencent Holdings’ HK$833 million.
Eight of last year’s top 10 donors, barringHSBC and pan-Asia insurance giant AIA Group, were from mainland China.
Some blue chip firms controlled by HongKong tycoons, who are known for their charity work in their personal capacityinstead of their listed flagships, were not on the list.
Tycoon Li Ka-shing donates HK$1 billion tohelp Hong Kong businesses survive city’s protest crisis
For example, Asia’s richest man Li Ka-shinghas over the years provided over HK$25 billion – mostly in Greater China – tomany philanthropic projects and charities, according to the website of hisnamesake foundation. Some 82 per cent of which was spent on education andhealth care projects.
His 39-year-old foundation on Fridayannounced a donation of HK$1 billion to help small and medium-sized firms hithard by anti-government protests in Hong Kong.
