Although the firm posted a 43 per cent rise in total saleable floor area delivered in the first half, the average selling price fell 34 per cent to 9,369 yuan per square metre from 12,518 yuan in the same period last year.

Floor area completed in the first half was 9 per cent less than the previous year. As a result, Sino-Ocean Land recorded a 7 per cent increase in revenue from property development to 3.24 billion yuan. Its gross profit margin dropped to 29 per cent from 43 per cent a year ago.

Sino-Ocean Land plans to complete construction of more than one million square metres of developments this year.

In the first half, Sino-Ocean Land generated seven billion yuan from contracted sales, achieving 88 per cent of their original full-year forecast. However, the average selling price dropped 31 per cent to 9,829 yuan per square metre from a year ago.

The contracted sales amount jumped 201 per cent to seven billion yuan as its saleable floor area rose 342 per cent to 698,000 sq metres in the first half.

David Ng Ka-chun, head of regional property research at Royal Bank of Scotland, said Sino-Ocean Land stood out from other mainland developers because it reached such a high percentage of its sales target in six months.

'To capture a higher profit margin, a luxury villa project launch has been delayed from the second half of this year to 2010,' he said. 'The project is expected to fetch higher prices next year.'

The developer expects selling prices and transaction volumes to rise steadily in the second half and said it would speed up the launch of mid-range residential projects.

The company proposed an interim dividend of 1 HK cent per share.

Shares in Sino-Ocean Land rose 1.28 per cent to close at HK$7.11 yesterday.

Income boost

A revaluation gain on a new office building lifted interim earnings

Beijing's largest developer posted net profit of, in yuan: 670m yuan