Shui On Construction & Materials plans to expand into mainland construction and property development operations, partly because of Hong Kong's depressed real-estate industry. Chairman Vincent Lo Hong-sui said housing reforms would lead to attractive investment opportunities in the mainland construction sector. 'The mainland construction industry is changing so fast now and certainly there is demand for experienced building contractors,' he said. The company would also consider participating in the mainland's property development projects to tap the growing demand for mid-priced homes through the group's privately run mainland property arm, he said. Shui On Group is engaged in a massive residential development in Shanghai. In Hong Kong, Mr Lo threw his support behind the Hong Kong Monetary Authority's seven-point package to stabilise interest rates, saying the business community would benefit from the measures. But he said the private-sector market would not see significant growth in the near future. Public housing construction investment remains its focus. He said more stable labour costs and cheaper materials had improved profit margins in the construction business. The company was awarded the contract for the development of a Private Sector Participation Scheme (PSPS) project in Tseung Kwan O in July. The project is expected to generate attractive returns since PSPS project terms provided for the buy-back of the 3,200 flats by the Housing Authority. The company has arranged a $2.2 billion syndication loan to finance the PSPS housing project. The company has expressed interest in bidding for more than 20 projects the Housing Authority will offer for tender in the next six months. Contracts on hand at the end of last month amounted to $12.1 billion and outstanding construction division works amounted to $9 billion.