People ride an escalator in the lobby of the Olympian City Two developed by Sino Land Co in Hong Kong. The locally-based developer said Thursday its underlying profit in the year ended June fell by 2.6 percent from the previous accounting year. Jerome Favre / Bloomberg News

Net income up 63% to HK$6.09b from HK$3.73b

Sino Land Co, the Hong Kong developer controlled by billionaire Robert Ng, said full-year underlying profit declined 2.6 percent due to a decline in apartment sales.

Sino Land, the smallest among the seven Hong Kong developers included in the Hang Seng Property Index, said net profit excluding gains from property revaluation during the year ended June 30 slid to HK$3.51 billion from HK$3.6 billion the year before.

Net income will stand at HK$6.09 billion when gains from revaluation are counted in, up 63.3 percent from the previous year's HK$3.73 billion, the blue-chip developer said in a Hong Kong Stock exchange statement Thursday.

Sales fell to HK$7.7 billion from HK$9.69 billion. The company declared a final dividend of HK$0.3, unchanged from last year, which added up to a total dividend for the full year of HK$0.4 together with the interim dividend.

Sino Land will "continue to selectively replenish its land banks, both in Hong Kong and the mainland, to replenish the earning potential," company chairman Ng said in the statement.

Ng also said that Sino Land expects further growth from residential sales and rental income from new investments.

"I am very optimistic about Sino Land's future performance as Hong Kong's property market will remain buoyant," Francis Lun, general manager of Fulbright Securities, told China Daily.

Although the Hong Kong government has announced a series of measures since last year to prevent an asset bubble from materializing in the city, Lun does not think the intervention will effectively cool the market, as supply of new homes will remain well short of demand in the next two years.

Hong Kong's home sales rose 33 percent in August to the highest level in almost three years, the Land Registry also said Thursday.

Total sales of residential units reached HK$69.2 billion last month compared with HK$52.2 billion in July. In terms of transaction volume, the number of residential units which changed hands during the month rose to 14,699 compared with 12,957 in July.

"I am not expecting more tightening measures from the government as no one wants to see the city's home prices slump like that in 1997," Lun added.

Shares of the developer stood unchanged at HK$13.58 at the close of trading on the city's benchmark Hang Seng Index Thursday. Compared with the 4.6 percent decline in the property index, Sino Land has lost 10 percent of its market value in Hong Kong trading this year.

Credit Suisse earlier this week raised its target price for Sino Land to HK$17.55 from HK$16.99, and maintained its "outperform" call on the stock.

China Daily

(HK Edition 09/03/2010 page2)