China Travel upbeat despite profit dip
Travel agency and hotel operator China Travel International Investment is upbeat on the long-term outlook of the mainland property market and will invest in tourism-property complexes there.
The company's net profit dropped 8 per cent year on year to HK$330 million in the first six months of this year, owing to start-up costs at its hotel project in Xianyang, Shaanxi, and exchange losses from its investment in Zhuhai hotel projects. Sales increased 7 per cent to HK$2.1 billion in the period.
"China will become the largest economy in the next 10 years and will have one billion people living in urban areas by 2030," Xu Muhan, executive director of China Travel, said yesterday.
"In the longer term, the mainland property market will be on the uptrend, regardless of cooling measures introduced by the government."
The company has invested billions of yuan in hotels and tourist spots on the mainland, Hong Kong and Macau. It is now diversifying its focus into residential projects in popular tourism destinations, aiming to build resorts and upmarket residential developments near cities or areas popular with tourists.
The company expects the hotel business in Hong Kong and on the mainland to continue to be robust this year.
One of its properties, Ocean Spring Resort in Zhuhai, however, continued to weigh on the bottom line as it swung into a HK$17 million loss in the first half from a HK$15 million profit in the same period last year.
Earnings per share fell 7 per cent to 5.8 HK cents. The board declared 2 HK cents as interim dividend.