Chairman Kong Qingping attends a news conference in Hong Kong Thursday. Dale De La Rey / Bloomberg

Hong Kong-listed China Overseas Land & Investment Ltd, the country's largest developer by market value, said 2010 net profit climbed 66 percent on stronger property sales as well as gains from property revaluations and the sale of stakes in several real estate projects.

Net income rose to HK$12.4 billion or HK$1.51 a share, from HK$7.47 billion or HK$0.92 a share a year earlier, the company said. That compares to the HK$9.31 billion average estimate of 18 analysts, according to data compiled by Bloomberg. Sales rose 18.8 percent to HK$44.3 billion from HK$37.3 billion in 2009.

Premier Wen Jiabao said earlier this month that the central government will "resolutely" press ahead with controls on the property market to curb speculation, reiterating a pledge to keep housing affordable. The government will "severely punish" irregularities in the real-estate market, implement differentiated credit and tax policies, and hold local officials accountable for maintaining stable home prices, he said. The pledge came after home prices in the country soared over the past year.

"China Overseas's earnings show prices haven't really been affected by those measures and that there is genuine demand for housing," said Kenny Tang, Hong Kong-based executive director at AMTD Financial Planning Ltd. "Still, investors may be concerned whether more measures to curb prices will be implemented."

China Overseas hasn't been affected by property curbs imposed by the government yet, Chairman Kong Qingping said in a March 7 interview.

The measures will help control home prices in the short term, though long-term demand will continue to be strong, he said.

The government's efforts in reining in soaring home prices haven't deterred the company's pace of business expansion.

China Overseas expects its capital expenditure to rise 21 percent to HK$63 billion in 2011 from HK$52 billion last year, Kong said at a briefing in Hong Kong on Thursday.

The developer plans to set up a real estate fund with up to $500 million in assets, as it bets that government measures won't curb property demand.

China Overseas made a total gain of HK$1.47 billion from several asset sales including its interest in three projects by a real estate fund and another project in Nanjing in southeastern China, it said.

"Greater volatility in the China property market is anticipated amid increased uncertainty," Kong said in a statement accompanying the results.

In the wake of the government's measures to cool down the over-heating residential market, China Overseas plans to further diversify its business by raising the proportion of its investment properties.

The company is aiming for investment properties to make up 20 percent of profit, Kong added.

On questions about the company's business expansion outside the mainland, Kong said China Overseas sees Hong Kong and Macao as "important markets".

China Overseas, which builds homes and offices in 20 cities on the mainland, said operating profit from its property development business on the mainland rose 55 percent to HK$16.34 billion, accounting for 79 percent of the group's total profit.

The company sold a total of HK$67.1 billion worth of properties during 2010, up 40 percent from a year earlier, it said Thursday.

China Overseas acquired a total of 11 parcels of land in nine cities including Chengdu, Dalian and Beijing with a total gross floor area of 3.32 million square meters during the year, it said.

The company will pay a final dividend of HK$0.17 per share, compared with HK$0.13 a year earlier.

Bloomberg - Reuters

(HK Edition 03/18/2011 page3)