Beijing's efforts to cool the overheated property market sliced Midland Holdings' annual net profit by nearly 23 per cent.
Midland recorded a net profit of HK$532.79 million for the year to December, a decline of 22.9 per cent from its record profit of HK$691.23 in 2009, blaming the government's efforts to brake the property sector.
Midland chairman Freddie Wong Kin-yip said the profit fall was due to 'the government's frequent intervention in China's property market which affected our mainland operations' as well as intensified competition in Hong Kong's real estate agency industry.
As a percentage of total revenue, the mainland business's contribution fell to 10.5 per cent last year from 14.2 per cent in 2009, executive director Angela Wong said. Its commercial and retail business in Hong Kong accounted for 13.3 per cent of its total revenue last year, up 3.3 percentage points over 2009. The contribution from local residential business also grew slightly by 0.2 percentage point to 75.2 per cent of total revenue.
Midland's data showed that primary and secondary flat transactions in some key mainland cities such as Shanghai and Shenzhen last year fell as much as 48 per cent year-on-year.
Despite the drop in net profit, group turnover rose 10 per cent to more than HK$3.73 billion last year.
The group expected the property market to remain relatively stable this year, and declared a final dividend of 20.28 HK cents, and a special cash bonus of 11.8 HK cents to commemorate its 38th anniversary.