China Vanke says no plans for global role for Hong Kong arm

PUBLISHED : Thursday, 28 February, 2013, 12:00am
UPDATED : Thursday, 28 February, 2013, 5:02am

Investors who have pushed shares in Vanke Property (Overseas) higher in the hope that it could become the global investment arm of its parent, China Vanke, could be disappointed.

Shares of the Hong Kong-listed company had risen more than 17 per cent since the beginning of the year to yesterday's close of HK$15.02, as investors bought the idea that it could be used as an offshore investment division of China Vanke, the mainland's biggest developer.

However, the group's president, Yu Liang, said yesterday that China Vanke had not considered injecting any offshore projects into the subsidiary.

Yu said that while investing in overseas markets was part of the group's internationalisation plan for the long run, the plans were still in the beginning stages.

Group results for last year showed net profit rose 30.4 per cent to 12.55 billion yuan (HK$15.63 billion) despite the challenging operating environment for the mainland property market.

Sales for the year were 141.23 billion yuan, marking a new record in the mainland's property industry.

The fully diluted return on equity reached close to 20 per cent, which was the highest since 1993. Earnings per share were 1.14 yuan, up 29.5 per cent year on year.

Yu said the mainland government was likely to maintain property curbs in the long run, but the company had found a way to work with the measures by developing mass housing. About 90 per cent of its projects were homes of smaller than 144 square metres, which helped boost sales.

In Hong Kong, Yu said, the company would like to co-operate with other companies to expand its property investments in the city. He did not rule out the possibility of investing in Hong Kong on its own once Vanke Property was strong enough.

When the time was right, he said, China Vanke would inject its Hong Kong properties, including its joint-venture property project in Tsuen Wan, into Vanke Property.

Last month, China Vanke teamed up with New World Development to win a residential site in Tsuen Wan for HK$3.43 billon, its first investment in Hong Kong.

Two weeks ago, it acquired a 70 per cent stake in a high-end residential project in San Francisco in the United States from Tishman Speyer Properties.