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Despite Bright Figures in Food Delivery Industry, Staff are Facing Uncertainties

Every day, Edward Wong, 26, who is a freelance lifeguard and nursing assistant, spends a few hours delivering food in Tsuen Wan.  “I usually deliver food during my lunch time. Though the golden hours for taking orders are 7:30am-10am, 11:30am-1pm and 6:30pm-8:30pm, the frequency of orders highly depends on the location. For example, in Mong Kok and Sheung Wan, as long as you want, there will be orders to take,” said Wong, who works for both Foodpanda and Deliveroo, two of Hong Kong’s most popular food delivery services.  Wong is one of tens of thousands new food delivery drivers as demand for the service surged during the pandemic. Hongkongers are hungry. Hong Kong’s major delivery companies, Foodpanda, Deliveroo and Uber Eats, all reported significant increases in delivery demand.  A Deliveroo survey in January showed a 21% increase in spending and it predicted three-fourths residents are using the service more frequently.  Uber Eats said active users per month nearly tripled last year while total orders doubled, according to a Mingpao article. Foodpanda reported a 60% surge in orders during the first quarter of 2021. Companies are hiring thousands of delivery staff to meet the orders.  Last spring, the food delivery industry created 48,000 jobs, according to Hong Kong Business Times. But Wong said the number of delivery orders he gets has dropped because of a flood of new workers, and he plans to find another job soon.  “More people are becoming food delivery staff as they think the market is growing during the pandemic. However, the increase in staff is faster than the increase in orders in most areas,” said Wong, adding that his income has dropped by one-third from around HK$40,000 per month when he started.  While demand for food delivery surges, job positions open up. However, rising figures does …

Business

Hong Kong stock surges after holidays

Hong Kong stock closed more than one percent higher on Friday (October 15), as investors returned from holidays catching up with the global rebound driven by a good start of the corporate earnings season.  The Hang Seng Index soared 1.5 percent, or 368 points to 25,330 after recovering from a day low of  24,929 in early trade.  The Hang Sang TECH Index climbed 1.92 percent, or 119.16 points to 6,318.91 at the close with Tencent soaring 2 percent and Meituan increasing 4 percent.  The Hang Seng Index climbed 2 percent or 493 points this week, which was shortened to three trading days due to a typhoon and the Chung Yang Festival holiday. The US unemployment claims released overnight also encouraged stock buyers in Hong Kong. The number fell to 293,000 last week, the lowest level since the pandemic began.   The Shanghai Composite Index increased 0.4 percent or 368 points to 3,572.  In China, the restrictions of home loans in some of the biggest banks were removed on Friday, which also boosted Asian stocks.  Although the latest move is beneficial to developers, it is unlikely to solve their liquidity problems, head of China and Hong Kong research at CGS-CIMB Securities Raymond Cheng told Bloomberg.    Chinese property stocks bucked the market trend and were lower on Friday. China Overseas Land lost 3.57 percent and China Resources Land was lost 1.71 percent.   

Business

Guangdong businesses can apply for quarantine-free permits to enter Hong Kong

Employees of Guangdong companies can apply for quarantine-free business permits to visit Hong Kong starting today.  The online booking system has a daily quota of 1,000 for entry via the Shenzhen Bay Port or the Hong Kong-Zhuhai-Macao Bridge Hong Kong Port.  This is on top of the existing scheme that allows non-Hong Kong residents from Guangdong province to enter the city without quarantine, which has been in effect since Sept. 15.  Macau was removed from exemption on Sept. 25 because of its latest Covid-19 outbreak. Business owners welcome the new travel scheme. “Because of Covid and the quarantine policies, we were unable to meet friends and families, and I could not meet my business partners in Hong Kong,” said Feng Minliang, who owns a fashion exhibition-organising company in Zhongshan in Guangdong. “I think the new policy is very useful,” said Feng. “Although it is only a temporary solution, it is definitely a good start to help the economy recover from Covid.” Meanwhile, foreign businesses have expressed frustration with the city’s “zero-Covid” strategy. The American Chamber of Commerce said their efforts in lobbying the Hong Kong government to reopen its borders with the rest of the world has been fruitless, as reported by Bloomberg. “We’re at the point where it just feels like we’re talking to a wall,” Tara Joseph, president of AmCham in Hong Kong, told Bloomberg. “The longer the closing of borders goes on, the more vulnerable many businesses are,” said Brian King, the Associate Dean and Professor of the School of Hotel and Tourism Management at Hong Kong Polytechnic University. “There will be job losses.” The number of headquarters and offices of mainland Chinese companies in Hong Kong increased by 22% to 1986 between 2019 and 2020, according to latest statistics from the Census and Statistics Department. Meanwhile, …

Business

Policy Address 2021: Northern NT 'metropolis' to see massive housing development, increase to 350,000 units

  • The Young Reporter
  • By: YANG Zhenfei、WANG Jingyan 王婧言Edited by: Vikki Cai Chuchu、Kwok Chiu Tung 郭昭彤
  • 2021-10-06

Chief Executive Carrie Lam Cheng Yuet-ngor announced a massive development plan, including  housing, commercial property, transportation infrastructure and technology companies, on the border with the mainland in her last policy address today. The Northern Metropolis Development Strategy will add around 600 hectares of land to the Northern District and Yuen Long District for housing and commercial use, including 165,000 to 186,000 additional housing units, she said, bringing the total number of units to 926,000 for around 2.5 million people.  “It is the most vibrant area in Hong Kong, where urban development and major population growth will occur over the next 20 years,” Lam said. The area is also expected to generate about 650,000 jobs, of which 150,000 will be IT related.  Some of the land to be developed is brownfield, undeveloped  land mainly used as open storage yards, warehouses and other industrial or rural workshops. The land-use efficiency of these brownfield operation sites is generally low.  Li Che Lan, professor in public policy at City University Hong Kong said land is one of the most pressing issues in Hong Kong. She said the development of the New Territories will alleviate the problems of high housing prices and a housing shortage in Hong Kong. Mee Kam Ng, Director of the Urban Studies Programme at Chinese University of Hong Kong, said that the development of New Territories Area can considerably increase land supply. Li said the government should emphasize environmental protection during the development. However, Ng said the development plan is more realistic and environmentally friendly, compared to Lantau Tomorrow Vision, which will be built on reclaimed land. “The New Territories is the largest area in Hong Kong with the most ample development space, which has rich cultural heritage and historic sites,” she said, expecting that the area can turn into a …

Business

Hong Kong companies see increased cyberattacks last year as more work remotely, survey finds

Hong Kong companies reported increased cyberattacks over the last year, including ransomware attacks, as more employees work from home, said US security service provider Barracuda at a press conference in Hong Kong today. In Hong Kong, 76% of companies saw at least one cyberattack compared to 81% globally, according to a survey of 750 companies around the world conducted by UK market researcher Vanson Bourne and commissioned by Barracuda. A total of 66% Hong Kong companies interviewed reported ransomware attacks last year, and those with remote staff were more likely to be attacked.   Remote work may contribute to an increased risk of network security breaches and being attacked, Conrad Lee, senior sales engineer of Barracuda, said at the press conference. He also said that phishing has become more specific as hackers take advantage of wide-spread discussion of social issues on the web. “For example, attackers can make use of the discussion of COVID-19 on the internet to send phishing emails to several accounts or induce people to download apps,” he said, adding that the improvement of attack software could also be a factor. Hong Kong is a “relatively safe city” in network security but remote work and the use of web-based applications, such as Google Docs and Zoom, is a concern, Mr. Lee said. All Hong Kong enterprises in the survey reported concerns regarding security risks caused by the use of web applications, and 98% worried about problems of data leakage and ransomware gaining access through unmanaged devices. In another survey, 42% of Hong Kong companies reported ransomware attacks over the last 12 months, an increase of 1%, according to research by the Hong Kong Productivity Council in August and commissioned by Hong Kong Telecom. “The remote work will probably become the new trend and continue even though the …

Business

Cathay Pacific’s H1 losses narrow on higher cargo yield and cost-cutting

Hong Kong flag carrier Cathay Pacific Airways Ltd (00293) on Wednesday reported a net loss attributable to shareholders of HK$ 7.57 billion for the first half of 2021, down by nearly a quarter from a year ago due to reactivated cargo business and decreased costs amid the impact of COVID-19. Tightening travel restrictions and quarantine requirements in Hong Kong and other main markets caused great challenges to the company, Cathay’s Chairman Patrick Healy said. “COVID-19 will continue to have a severe impact on our business until borders are reopened and travel restrictions are lifted,” Mr. Healy told a news conference after the results were announced, adding that the sudden increase in coronavirus infections in mainland China recently made the situation more unpredictable than previously. Cathay said its first-half losses narrowed 23.3% from a loss of HK$ 9.87 billion the same period a year ago. However, its total revenue for the six-month period dropped about 43% to HK$ 15.9 billion under the COVID-19. Shares of Cathay rose 3.55% to close at HK$ 6.42 after the results, outperforming a 0.2% gain on the benchmark Hang Seng Index. Passenger service remained badly affected in the first half of the year as the revenue plunged 93.2% to HK$ 748 million. Revenue passengers carried dropped 96.4% to 157,000, and passenger capacity decreased 85% compared to the prior year. Basic loss per ordinary share shrunk 46.5% to 122.1 HK cents, compared to 228.1 HK cents in the previous year, the company said in a statement. However, Cathay said it saw a 24.4% surge in cargo yield and only a 0.6% decrease in the revenue of cargo business during the first six months of 2021, which helped mitigate the company’s losses. Its total operating expenses decreased 39.2% compared to 2020, with a 33.4% drop in staff expenses …

Business

Hong Kong SME Leading Business Index hits 3-year high in Q3 as business confidence returns

  The overall Standard Chartered Hong Kong SME Leading Business Index rose by 4.4 to 46.6 in the third quarter this year, the highest since Q3 in 2018, as small and medium enterprises (SMEs) regained business confidence amid the gradual easing of the COVID-19 situation in the city, said the Hong Kong Productivity Council (HKPC). Edmond Lai, Chief Digital Officer of HKPC, said in a news conference on Tuesday, “The survey shows that SMEs are flexing their muscles to pick up their business as fast as possible by increasing investment and expanding staff size.”  Kelvin Lau, senior economist of Greater China at Standard Chartered Bank Hong Kong Limited, expected the positive momentum to remain intact in the second half of 2021, backed by further development in the IT industries and a recovery in the real estate sector. The overall index, which is compiled by HKPC and sponsored by the Standard Chartered Bank, rose for three consecutive quarters despite it was still below the neutral mark of 50.  All five component sub-indices were up and among which the “global economy” recorded the most significant growth to 52.8 from 43.6 a quarter earlier, said Mr. Lai. It was followed by recruitment sentiment of 50.9 and investment sentiment of 49.1. Talking about SME’s perspective and planning in response to the economic recovery this year. The business performance of information and communications was the best as 56% of the SMEs surveyed said that their business returned to the levels before the pandemic or fared better than that, while accommodation and food services were the most affected, with 81% of SMEs reporting a setback in business.   The retail industry index also recorded a surge, rising by 10.7 to 46.9 quarter on quarter due to the continued unwinding of social distancing measures since the first quarter …

Business

Fairwood’s annual profit doubles due to government subsidies

Hong Kong’s second largest fast food chain Fairwood Holding Ltd (00052) reported net profit attributable to shareholders of HK$153.6 million in the financial year ended Mar 31, 2021, more than doubled from a year ago due to government subsidies. This was 152.4% above its yearly net profit of HK$60.9 million the previous year. However, its annual revenue dropped 12.7% to HK$2.65 billion under COVID-19. Shares of the company rose about 1% to close at HK$18 after the results were announced while the Hang Seng Index lost 0.97% to 28,983.89. Basic earnings per share of the company increased 152.2% to 118.59 HK cents, from 47.03 HK cents a year ago, it said in a statement. Fairwood, which operated fast food restaurants, institutional catering and property businesses, said mandatory social distancing policies and restricted opening hours for restaurants led to a significant reduction in restaurant patronage during the reported period. However, the increase in take-away services offset part of the loss in revenue. Businesses in mainland China were also affected with same-store sales down by nearly 27% in local currency. But the company was optimistic that its businesses in Hong Kong will recover as the pandemic is kept under control, and it will continue to expand in the mainland. With the completion of a bakery production line in April this year, the company would offer various bakery products and reduce costs, it said.  

Business

Hong Kong Disneyland Suffers Record Net Loss of HK$2.7 Billion in Fiscal 2020

Hong Kong Disneyland Resort reported on Monday a record net loss of HK$2.7 billion in fiscal year 2020 ending September 30, dragged by a plunge in non-local tourists during the coronavirus pandemic. The theme park had remained closed until February, 2021, which took up 60% of the fiscal year. Even the local guest reaction has been positive since reopening, the income cannot cover the high operation costs. Hong Kong Disneyland Managing Director Michael Moriarty said that the pandemic “is unpredictable” and their business strategy now focuses more on the local market. Park attendance was only 1.7 million during the reported period, a drop of 73 percent compared to prior year. Per capita spending dropped 18%, while the average hotel occupancy declined by 59 percentage points to only 15%, it said in a statement. Hong Kong Disneyland celebrated its 15th anniversary in November last year while the park only had 3 years in net profit since 2005. The net loss is the worst-ever on record and compared with a loss of HK$105 million a year ago.  In order to reduce cost, Disneyland adjusted operation days to only 5 days per week and about 4000 employees have been on unpaid leave since September, 2020.

Business

BNO migrants sell Hong Kong properties for UK tax reasons

  • The Young Reporter
  • By: Kwok Chiu Tung 郭昭彤Edited by: Zhu Zijin Cora 朱子槿
  • 2021-05-11

Hong Kong British National (Overseas) (BNO) passport holders moving to Britain tend to sell their properties in the city to avoid related taxes charged by the UK government on overseas properties and that may trigger a capital outflow of up to HK$280 billion from Hong Kong, based on banks and media estimation. BNO migrants will be subject to the UK's global tax system, under which their rental income from Hong Kong will be taxed and if they want to buy a residential property in Britain without selling their Hong Kong residence they have to pay an extra 3% of stamp duty. Therefore, Hong Kong residents emigrating to the UK are pondering what to do with their Hong Kong flats. Chan Siu-yi, 36, who moved to the UK several months ago with a BNO visa, has decided to sell her property in Hong Kong to avoid extra taxes. “The global taxation policy might charge us about €2000 (HK$18,717) every tax season if we don’t sell our property in Hong Kong after moving to the UK within 9 months,” she added. The British government launched a new policy after China passed a national security law last year, to allow Hong Kong BNO holders to live and work in the UK for up to five years and eventually seek citizenship. The policy is expected to spark a new wave of immigration. The British Home Office said in January that the number of immigrants via HK BNO visas is expected to reach between 258,000 and 322,400 over five years. Based on the estimation of Bloomberg Intelligence Research, up to 16,300 Hong Kong households may move to Britain via BNO visas this year and a maximum of HK$150 billion worth of properties from these families could be on sale in 2021 alone. A Bank of …