HONG KONG: Country Garden Holdings Co, the property developer controlled by the richest woman on the mainland, rose in Hong Kong trading yesterday, reversing earlier declines, after the company said net income climbed because of investment gains.

The developer advanced 3.3 percent to close at HK$3.44 on the city's stock exchange, bringing its gains this year to 81 percent, 42 percent higher than the 57 percent gain of the Hang Seng Property Index over the same period. The Index, which tracks six of the city's biggest developers, does not include Country Garden.

The company posted a first-half 78 percent increase in net income after record lending and the government's 4 trillion yuan ($585 billion) stimulus package lifted property sales and home prices on the mainland. Shares of developers listed in Shanghai have more than doubled in 2009, making the sector the best-performing on the Shanghai Composite Index.

"This shows that their core earnings are still okay," said Kenny Tang, an executive director at Hong Kong-based Redford Securities Co.

Net income rose to 1.82 billion yuan from 1.02 billion yuan a year earlier after the company booked a fair value gain of 431.8 million yuan from an equity swap. Contracted sales rose 6.5 percent to 8.79 billion yuan, while the area of property sold climbed 30 percent to 1.92 million square meters, it said.

Country Garden's income excluding the equity-swap gain dropped to 1.38 billion yuan from 1.46 billion yuan a year earlier, the Foshan, Guangdong-based company said in a statement yesterday. Revenue rose 24 percent to 9.2 billion yuan.

The company won't pay an interim dividend, unchanged from last year, it said in yesterday's filing.

The average selling price of Country Garden apartments fell almost 40 percent, to 4,973 yuan a square meter, in the first half, from 8,012 yuan last year, according to the filing. Sales and marketing costs dropped more than 50%, to 106.7 million yuan from 218.6 million yuan, it said.

Country Garden's controlling shareholder is Yang Huiyan, 27, the daughter of founder and Chairman Yeung Kwok Keung. Identified by Forbes in March as the richest woman on the mainland, Yang owns 59.3 percent of the company, according to a July 17 filing to Hong Kong's stock exchange. Yang and Yeung are the Mandarin and Cantonese pronunciations of the same surname.

Home prices in 70 major mainland cities advanced 1 percent in July from a year earlier, the biggest increase in nine months, the National Development and Reform Commission said in an Aug 10 statement.

The gain in Country Garden's stock price has lagged behind rivals including Shimao Property Holdings Ltd and Agile Property Holding Ltd, which have more than doubled.

Bloomberg News

(HK Edition 08/26/2009 page4)