- First-half profit was HK$19.7 billion, sales HK$78.2 billion
- Firm earlier unveiled plan to buy property assets from Citic
China Overseas Land & Investment Ltd., the country’s second-largest developer by market value listed in Hong Kong, said first-half profit jumped 21 percent on gains from property sales as the nation’s residential prices soared.
Net income rose to HK$19.7 billion ($2.5 billion) from HK$16.3 billion a year earlier, the company said in a Hong Kong stock exchange filing on Monday. The state-owned developer benefited from its focus on top-tier hubs, such as Shenzhen and Shanghai, where home prices surged as much as 60 percent this year.
To further expand its presence across the nation, the firm in March announced a plan to buy residential property assets from Citic Ltd. in 25 cities, amid a broader restructuring of state-owned enterprises.
Revenue rose to HK$78.2 billion. That beat the HK$76.5 billion median estimate from seven analysts in a Bloomberg survey. The developer proposed an interim dividend of 35 Hong Kong cents, an increase of 75 percent.
China Overseas will sell 1.1 billion shares at HK$27.13 each to Citic companies as part of the purchase, it said in March. Citic, one of China’s biggest conglomerates that sprung from the nation’s first state-owned investment corporation, will become the second-largest holder of the builder.
The share sale will set the stage for China Overseas to replenish its land bank amid surging costs in the largest cities. The developer will acquire 23.5 million square meters (253 million square feet) of land, equivalent to 57 percent of its existing land bank at the end of last year, according to the latest update on June 29.
The developer raised its 2016 contracted sales target by 17 percent to HK$210 billion to reflect changes in the property market and Citic’s acquisitions, it said in the statement.
The shares rose as much as 0.7 percent in Hong Kong trading Monday. They increased about 0.4 percent this year compared with a 4.3 percent gain in the city’s benchmark Hang Seng Index.
— With assistance by Emma Dong