HANG Lung Development Co has recorded a 16.3 per cent increase in taxed profit to $742.6 million for the first half to December last year, aided by impressive results from Amoy Properties. Amoy stood out as the best performer in the Hang Lung Group with a 46 per cent rise in net profit to $601.1 million for the six months. The strong performance of the property investment arm was fuelled by a 26.6 per cent rise in rental income to $559.2 million and a gain of $115.9 million from fixed asset disposals. However, the group's hotel operating arm, Grand Hotel Holdings, suffered a 7.4 per cent decline in profit to $58.9 million. Group chairman Ronnie Chan Chi-chung is optimistic of the future. He is anticipating satisfactory earnings from property sales and increased recurrent income from investment properties, as well as a recovery in the hotel industry. Mr Chan said Hang Lung was successful in its sales of new properties in the first half, which had bolstered its earnings growth. Despite a difficult market, he said more than 1,800 flats in Hanford Garden and Tai Hing Gardens in Tuen Mun were sold, assuring the profit contribution from property development for this fiscal year. ''Together with the expected strong performance from Amoy and steady performance from Grand Hotel Holdings, I am confident that the full-year's results should show satisfactory growth over last year,'' he said. For the six months under review, Hang Lung saw turnover jump 14.1 per cent to $1.86 billion. Earnings per share climbed 13.8 per cent to 63.5 cents and the company has recommended an interim dividend of 20.5 cents a share against 19 cents a year earlier. At Amoy, turnover surged 43 per cent to $871.6 million, while earnings per share improved 16.7 per cent to 26.6 cents due to the enlarged share capital. A dividend of 12.5 cents a share will be paid, compared with 11.5 cents in the year-ago period. Grand Hotel's turnover fell slightly to $169.8 million from $179.8 million. Earnings were 8.64 cents per A share and 0.86 cent per B share. It will pay unchanged interim dividends of six cents per A share and 0.6 cent per B share. Commenting on the hotel operation, Mr Chan said the slight profit decline was due to low room rates for the entire industry, although its own hotels achieved an average of more than 96 per cent in occupancy. Increased expenditure and the start-up costs at the Wesley hotel also had an impact on the results, he said. But the worst of the down-cycle in the hotel industry was over and the operating environment should begin to improve this year, he said. To further strengthen its recurrent income base, Mr Chan said Amoy hoped to add a further $2.5 billion worth of investment property to its portfolio in the coming year, following the recent acquisition of the Standard Chartered Bank Building. ''Given high inflation and low interest rates, there is no reason to alter our strategy of selective purchasing which has been very successful so far, especially since we have such a strong balance sheet and healthy cash flow,'' he said. The Peak Galleria shopping mall, being built by Amoy, is nearing completion and is due to open in September. The development of the Grand Centre, on the site of the former Grand Hotel in Tsim Sha Tsui, is progressing smoothly. On expansion of property business in China, Mr Chan said its activities reached a new height recently when a Hang Lung-led consortium acquired a prime site in Shanghai. ''This purchase was in line with our stated China strategy of concentrating only on projects in the best possible locations in a few major cities with good economic prospects,'' he said. The US$500 million project in Shanghai is 42 per cent owned by Hang Lung and Amoy, 23 per cent by Henderson Land Development, 15 per cent by Hysan Development and 20 per cent by the Shanghai authorities. The site will be developed into a complex with 340,000 sq metres of office, residential and shopping space.