New World’s First-Half Underlying Profit Rises 45% on Home Sales

New World Development Co. (17), the Hong Kong builder controlled by billionaire Cheng Yu-tung, said underlying profit for its fiscal first half rose 45 percent after it booked more apartment sales in the city.

Profit excluding property revaluations advanced to HK$4.1 billion ($529 million) for the six months ended Dec. 31 from HK$2.83 billion a year earlier, New World said in a statement to Hong Kong’s stock exchange today. That compares with the HK$3.26 billion median estimate of four analysts compiled by Bloomberg News. Sales rose to HK$24.5 billion from HK$19.1 billion.

New World is accelerating apartment sales and the pace of replenishing its land reserves in Hong Kong as the government pledged to increase land supply to help make housing more affordable to the general public. The developer and a unit of China Vanke Co. in January paid HK$3.4 billion for a project atop a train station in the city’s northwestern Tsuen Wan district.

Cheng, 87, retired last year as chairman of the company and was replaced by son Henry Cheng. The elder Cheng, who also controls the world’s biggest jewelry retailer, is 35th on the Bloomberg Billionaires Index with a net worth of $20.1 billion.

New World was the best performer in the nine-member Hang Seng Property Index last year after its share price almost doubled. The stock rose 3.3 percent to HK$13.70 at the midday break today, bringing its gain this year to 14 percent. The property gauge gained 2.1 percent so far in 2013.

Hong Kong’s home prices have doubled in the past four years on record low mortgage rates, an influx of mainland Chinese buyers and lack of new supply.

New World, with businesses in property, infrastructure, hotels and retail, in September won the right, for an undisclosed price, from the Hong Kong government to develop a residential and retail project in the city’s Mong Kok district.

To contact the reporter on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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