Jan. 31 (Bloomberg) -- Hang Lung Properties Ltd., the Hong Kong developer investing more than $8.5 billion building malls in mainland China, said 2012 underlying profit almost doubled after the company sold more properties in the city.
Profit excluding revaluation gains and deferred taxes climbed to HK$6.18 billion ($797 million) from HK$3.12 billion a year earlier, Hang Lung said. That compares with the HK$4.79 billion average estimate of 14 analysts surveyed by Bloomberg. Sales rose to HK$7.37 billion from HK$5.71 billion, the company said.
Hang Lung Chairman Ronnie Chan is betting on rising consumption by China’s expanding middle class to fuel demand for high-end shopping malls. The company hasn’t purchased land in Hong Kong, the world's most expensive place to buy a home, in more than a decade and has been selling apartments and commercial properties in the city to help fund expansion in other Chinese regions.
Hang Lung's financial position “should allow it to take advantage of potential new acquisition in both mainland China and Hong Kong,” Deutsche Bank AG’s Hong Kong-based analysts Tony Tsang and Jason Ching wrote in a note to clients after the results were announced.
The Hong Kong-based company’s shares closed 1 percent lower at HK$29.25 in Hong Kong, after declining as much as 1.7 percent.
Rental profit from China, which includes shopping malls in Shanghai, Jinan and Shenyang, rose 18 percent to HK$2.37 billion, while in Hong Kong it gained 4 percent to HK$2.53 billion, Hang Lung said.
The company made HK$846 million from apartment sales in Hong Kong during the year, Hang Lung said. It also booked a gain of HK$2.15 billion from the sale of investment properties. Hong Kong is the world’s most expensive to buy a home, according to property broker Savills Plc.
Hang Lung still has about 1,400 unsold completed residential units in the city, Chan said in a briefing in Hong Kong today.
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