New World China Land has posted a 70 percent jump in its full-year net profits, boosted by a surge in property sales and rental operations.

The company's annual net profits were HK$2.02 billion, while its attributable operation profits before provision and finance costs soared 45 percent to HK$1.76 billion.

Property sales leapt 60 percent to HK$1.38 billion during the fiscal year as sales rose 35 percent to 884,000 sq m.

The company's gross profits margin slightly increased by 0.1 percentage point to 33 percent, yet the average selling price slumped 11 percent to 7,020 yuan per square meter.

Executive Director Adrian Cheng said the company won't slash prices.

"It is not healthy for the market if all the property developers cut their prices together," Cheng said, adding that the company will enhance its competitiveness by improving property quality.

The full-year rental operations of New World China Land jumped 25 percent to HK$431.5 million, boosted by the continued improvements in rentals of a shopping arcade in Beijing and an increase in occupancy of offices.

Regarding the company's land reserves, Cheng said: "We currently have a land bank of 28.1 million sq m, which will be adequate to support our development for the next seven to 15 years".

Cheng also noted that the company's aggregate cash on hand was HK$8 billion.

Yet he said the company will use its resources cautiously and won't consider acquiring other property developers until December, as the recent global financial turmoil has produced uncertainties in the property market.

"We will hold our cash at the moment and look for acquisition opportunities next year," Cheng said.

The company aims to complete new projects of 1.1 million sq m in the 2009 fiscal year, while it already launched 350,000 sq m from July to September, with 47 percent of them, or 164,500 sq m, sold.

Concerning the impact of the global financial downturn, Executive Director and Financial Controller Lynda Ngan said the mainland's property market won't be seriously affected, as it is unique.

"However, the central government's tightening measures will have a greater impact on the market," Ngan said.

Looking ahead, the company expects the domestic market to experience irrational behavior associated with the financial turmoil, and it believes the property market on the mainland is still in the early stage of the cycle.

"The market will not perform badly in the long run, as rapid urbanization on the mainland has generated genuine housing demand," Cheng added.

(HK Edition 10/14/2008 page2)