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Hong Kong-listed companies lag in corporate giving

HONG KONG -- Hong Kong-listed companies lag well behind their American peers in charitable giving, according to new research.

Companies listed in Hong Kong are required to disclose in their financial reports if they have made donations of more than HK$10,000 ($1,290). According to data compiled by Sodata Analytics Foundation Association, a new organization focused on this activity, only 647 of 1,644 companies listed on the Hong Kong Main Board last year, or 39.4%, reported crossing the donation threshold. Of those who did give, the average donation was HK$13.7 million.

That was down 6.8% from 2014's average of HK$14.7 million. However, the proportion of companies donating was up from 34.6% and the average donation as a share of both revenue and profit also rose, due to declines in the companies' financial results.

Edward Lashinski of Sodata said the average Hong Kong company's total donations came to about one-third of the U.S. level. "There is significant scope for improvement," he said.

Sodata's analysis showed that among Hong Kong donor companies, corporate giving represented 0.033% of revenue and 0.265% of profit on average last year. That compared with 0.028% and 0.229% of revenue and profit respectively in 2014.

Lashinski said that Chinese companies incorporated overseas, known as "red chips," were among the biggest laggards among Hong Kong-listed companies. Among red chips which did donate, the average donation was HK$1.9 million in 2015. China Mobile, the largest red chip by market capitalization, donated HK$66.5 million.

Nevertheless, Chinese companies dominate the ranks of top givers, accounting for eight of the 10 largest Hong Kong donors, excluding British insurer Prudential. PetroChina was the second-biggest giver in 2015, according to Sodata's database, with HK$1.11 billion in donations.

No. 3 Tencent Holdings came in at HK$561.2 million. Pony Ma Huateng, its chairman and chief executive, said at an event in Hong Kong last month that the company would set a benchmark of donating 1%-2% of profits.

"The ranking is not a competition," said Sodata's Michael Yip, who said that difficult economic conditions had created a more challenging environment for corporate giving.

The database was created as a volunteer project by Yip and his partners, who studied together in the University of Chicago's Booth School of Business Executive MBA program. They are aiming to promote corporate social responsibility and to help companies measure their performance against their peers. Yip expects this will benefit the public reputations of donating companies among the public and potential employees.

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