【ICTSI Earnings】ICTSI's Woo Tian Hai: Iran War Clouds Cause Hong Kong Port New Route Arrangements to Be Delayed, but Not Expected to Worsen Port Business Downturn

Middle Eastern conflicts disrupt global trade and transportation. Wharf Holdings Chairman Wu Tien-hai admitted at the earnings meeting that there has been an impact on port operations. Wu Tien-hai stated that before the escalation of tensions in Iran, the group signed some shipping routes to Hong Kong to boost freight volume. However, since the outbreak of conflict in Iran, many shipping companies have adopted a cautious attitude and have temporarily postponed new arrangements. He openly said he does not know how long the delays will last, or whether they will be canceled, depending on the situation in the Middle East.

“So some work that was originally helping Hong Kong ports and could increase freight volume has temporarily been wasted.”

Wu Tien-hai pointed out that this is a negative for the group’s port business, but he expects the decline will not accelerate in the short term, only slowing down the recovery process.

On the other hand, Wu Tien-hai believes there are potential opportunities arising from the Middle East situation. He noted that due to the chaos in Middle Eastern freight, some shipping companies are reevaluating their strategies.

“In the past, they concentrated their cargo volume at certain points, even increasing their share—placing more eggs in fewer baskets. When chaos occurs, those ports may find it very difficult to maintain normal operations. Should they diversify their ‘eggs’? If they do, can Hong Kong seize the opportunity? That remains unclear.”

Additionally, he mentioned that Hong Kong ports face challenges from nearby ports in Shenzhen and Nansha, Guangzhou. Five to ten years ago, Shenzhen’s ports had surpassed Hong Kong, but at that time, Hong Kong still held about 30% of the market share in the Greater Bay Area of South China. After the aggressive expansion and promotion of ports in Nansha, Guangzhou, last year Nansha’s throughput exceeded Hong Kong’s. Currently, in the South China region measured by international cargo volume, Shenzhen accounts for about 60%, Nansha over 20%, and Hong Kong less than 20%. He attributes this to “internal competition,” noting that Shenzhen and Guangzhou Nansha ports are backed by state-owned enterprises, whereas Hong Kong ports are fully private, making “competition unfair.”

Optimistic about Hong Kong Property Market — Property Projects “Entering the Harvest Stage”

Regarding Hong Kong’s property market, Wu Tien-hai expressed optimism about the future, but the group has no debt pressure and is not in a hurry to sell properties. The super-luxury homes are the same—“if the price is right, we will do it; if not, we wait a bit. (Wharf) definitely has the strength to do so.” He indicated that the situation in the Middle East has led him to see some people and capital returning or staying in Hong Kong, which presents an opportunity. Although there will still be competition from Singapore, he hopes Hong Kong will “strive for self-improvement.”

When asked about the group’s future growth drivers, Wu Tien-hai said that since last year, Hong Kong’s property income has increased. Several years ago, the group’s invested Hong Kong property projects have gradually entered the “harvest stage,” and he hopes to gradually increase revenue sources from this to boost profitability and offset the impact of the weak mainland market, creating a balance of gains and losses.