Shenzhen Investment earnings jump 50pc

PUBLISHED : Wednesday, 11 April, 2007, 12:00am
UPDATED : Wednesday, 11 April, 2007, 12:00am

Shenzhen Investment, the Hong Kong-listed investment arm of Shenzhen's municipal government, said profit rose 50.39 per cent last year, driven by a disposal of non-core operations and a revaluation gain.

Net profit soared to HK$803.61 million from HK$534.34 million in 2005.

The group recorded a disposal gain of HK$473.53 million from the sale of its effective 19 per cent interest in power plant operator Shenzhen Mawan Power and its 31.1 per cent interest in cable-television provider Shenzhen Topway Video Communication.

Profit also included a HK$257.7 million revaluation gain on investment property.

Revenue dropped 23.33 per cent to HK$2.3 billion from HK$3 billion in 2005 as property sales, the main contributor, fell 44.13 per cent to HK$1 billion from HK$1.79 billion.

Shenzhen Investment sold 115,000 square metres of gross floor area of residential, office and commercial property last year.

Chairman Hu Aimin forecast high net profit growth in the coming two years after an increase 'by multiples' in the targeted sales area between this year and next.

Chief operating officer Joe Zhang Huaqiao said the company aimed to complete about 381,200 square metres this year and 750,000 square metres next year.

'Gross profit margins for this year and next will be between 40 and 50 per cent,' Mr Zhang said.

The group had 12 projects under development at the end of last year, with a gross floor area of about 1.42 millions square metres.

Shenzhen Investment said its financial position remained sound with cash reserve of HK$4.21 billion. It declared a special dividend of 11.45 HK cents to distribute the gain from the Mawan Power sale on top of a final dividend of 8.54 HK cents.

Its shares climbed to 52-week high of HK$4.28 before closing up 1.2 per cent at HK$4.21.