China Resources Land Ltd. (1109), a state- controlled developer, said 2011 profit rose 34 percent after the company sold more homes and earned higher rental from an expanding investment property portfolio.
Net income increased to HK$8.07 billion ($1.04 billion), or HK$1.472 Hong Kong cents a share, from a restated HK$6 billion, or HK$1.188 Hong Kong cents, a year earlier, the company said in a filing to the Hong Kong stock exchange today. Sales rose to HK$35.8 billion from HK$25.7 billion.
Earnings at the company, one of the two mainland Chinese developers included in Hong Kong’s benchmark property index, has benefited from an earlier push to expand its commercial real estate development. Rentable area of its investment portfolio will probably double between now and the end of 2013, according to a March 7 report by Deutsche Bank AG.
“This planned increase should drive growth in the company’s recurrent rental income,” Tony Tsang and Jason Ching, analysts at Deutsche Bank, wrote in the March 7 report. More completed investment properties “‘should help bring down the gearing levels on the balance sheet and further enhance its financing capacities,” they said.
Income from investment properties jumped 40 percent to HK$1.1 billion last year, while those from property sales climbed 30 percent to HK$10.3 billion, the company said.
Shares of China Resources increased 11 percent this year, the worst performer in the seven-member Hang Seng Property Index (HSP), which rose 19 percent over the same period. They gained 2.1 percent to HK$13.82 at the close today in Hong Kong before the earnings were announced.
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