Mr Fung, who is chairman and managing director of Sun Hung Kai and Co, said he was optimistic about the group's prospects.

The dividend per share declared was four cents, double market expectations.

Tian An shares closed at $3, down five cents, placing them on a historic price-earnings multiple of 17.25 times. That represents a 30 per cent premium on the market rating.

Described by Baring Securities as the quintessential China property play, Tian An has about 32 million square feet of land bank in and around Shenzhen, Xiamen, Guangzhou and Changzhou, 87 per cent of which is not developed.

By comparison, New World Development - the Hang Seng Index stock with the largest China land bank - has more than 44 million sq ft.

Mr Fung said: ''Having already established a firm base for its property development operations in southern China, the group is moving to expand its presence in eastern coastal China projects in Pudong, Nanjing, Changzhou and Wuxi.'' The dividend ratio was 24.75 per cent. Turnover rose 37.4 per cent to $193.63 million.

Operating profit rose just $10 million to $35 million, while share of earnings from associated companies was up 459 per cent to $104.60 million.

The effective tax rate at the company was 6.36 per cent, compared with Hongkong's flat levy of 17.5 per cent.

An extraordinary profit of $6.1 million was recorded from the disposal of a subsidiary.

Mr Fung said: ''Within the year, substantial improvement was witnessed in the regulatory environment for China's real estate industry.

''China moved towards establishing the land use rights system on a nationwide basis. At the same time greater efforts were commenced to strengthen control over supply of development land and the management of property re-sales and to speed the formation of a secondary property market.

''China's real estate industry is evolving towards a more mature stage of development.'' The profit from associates is partly made up of property pre-sales, including 280,000 sq ft of the Chengongmiao Industrial Estate at HK$200 per sq ft, and 170,000 sq ft of the Tian An International Building at HK$1,980 per sq ft.

This generated $120 million alone, according to data from Baring Securities.

Similar contributions under this item can be expected this year and next, with about $100 million of rental income from Tian An International Building by 1994.

According to The Estimate Directory, profits this year should rise 45 per cent to $191.7 million, with earnings per share at 24 cents and a dividend of seven cents a share.

The estimated net asset value per share is $3.75, placing the stock on a 25 per cent discount to net assets.