[photopress:property_china_oversea.jpg,full,alignright]China Overseas Land & Investment Ltd., the Hong Kong-based builder controlled by the mainland’s construction ministry, said 2007 profit jumped 76% as home prices rose.
Net income climbed toUS $537 million from $305 million. Sales rose to HK$2.1 billion from HK$1.4 billion a year earlier.
Home prices in 70 of China’s biggest cities surged 10.5% in December from a year earlier, the most since the index began in July 2005.
Inflation climbed to an 11-year high last month, outstripping returns on bank deposits and driving investment in stocks and real estate.
Premier Wen Jiabao this month pledged to curb ‘excessive’ growth of property prices and build more homes for poorer families.
Curbs are ‘beneficial in the long term for property developers with strong consolidated capabilities,’ China Overseas said in a statement. ‘The group continues to be optimistic about the China real-estate market.’
There are almost two contradictory stories.
Home prices in some of China’s biggest cities, including Shanghai and Shenzhen, fell in the first two months of 2008 as curbs started to bite. BNP Paribas’ Hong Kong-based analyst Andy So wrote in a report this month investors should cut holdings in Chinese developers because of slowing housing starts and prices that may crimp earnings growth.
And yet we still keep getting reports like China Overseas. Possibly it is a question of timing but it is still a conundrum.
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