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August 18, 2009

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China Overseas increases sales target

CHINA Overseas Land and Investment Ltd raised its 2009 sales target by 23 percent, after the Chinese developer reported yesterday a 31.8 percent jump in first-half earnings as surging new loans in China boosted home sales.

China Overseas had raised its full-year sales target to 4.3 million square meters from an earlier goal of 3.5 million square meters, Chairman Kong Qingping said in Hong Kong. Net profit attributable to shareholders rose to HK$3.04 billion (US$392.3 million) during the January-June period, from HK$2.3 billion a year earlier, the company said.

Its property sales on China's mainland surged 70.8 percent to HK$25.64 billion, the highest level on record.

Chinese banks lent a record 7.37 trillion yuan during the first half to support the government's 4 trillion yuan (US$586 billion) infrastructure-focused stimulus plan, prompting a rally in the domestic property market.

"Triggered by the loose monetary policy, rigid demand suppressed in 2008 was released in the first half of the year, resulting in an eminent rise in both the quantity and value of property sales," China Overseas said in its statement.

Property prices have stabilized in recent weeks after new loans slumped last month, fueling speculation that the central government may act to rein in mortgage lending to contain credit risks and avoid asset price bubbles.

Despite market uncertainty, China Overseas, which has bought three pieces of land in China for about HK$3.8 billion so far this year "will continue to acquire prime land at low cost through various ways and means" to ensure an annual profit increase of more than 20 percent in the next four to five years, the statement said.

China Overseas is a unit of China State Construction Engineering Corp, the country's biggest home builder.


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