The lapse of the Government's 85,000-unit housing-construction target and a private-housing sector slowdown nearly levelled first-half earnings growth at cement-manufacturer TCC International Holdings, despite a 77 per cent surge in sales. Net profit in the six months to June 30 rose 2.3 per cent from a year earlier to HK$76.07 million, with a drop in net profit margin to 23.5 per cent from 51.5 per cent a year earlier. TCC International, controlled by Taiwan conglomerate Koos Group, saw turnover jump 77 per cent from a year earlier to HK$323.7 million. TCC managing director Wu Yih-chin said the drop in profitability was a result of the cutback in the Government's public-housing construction plan and a sluggish private-housing construction sector. Sales of cement in Hong Kong dropped 15 per cent during the period, while prices fell 5 per cent, according to Mr Wu. The company believes the construction business is unlikely to recover for two years, but the sales price of cement has stabilised. Strong growth in cement sales in the company's Philippine Cement distribution business eased the fall in Hong Kong demand. The Philippines' unit contributed about HK$20 million net profit to the company. A 10 per cent stake in Taiwan's largest private cellular-services provider, KG Telecommunications, which TCC International acquired at the end of April, contributed HK$10 million net profit. KG Telecom has recorded about NT$1 billion (HK$250 million) net profit. TCC chairman Leslie Koo Cheng-yun said KG Telecom was expected to earn about NT$2 billion net profit for the full year and would make a substantial full-year contribution to the company. Mr Koo said TCC International would diversify its revenue stream by continuing to invest in telecommunication-related business. Telecommunication and technology-related business is targeted to contribute about 50 per cent of the company's net earnings in two to three years, up from about 13.1 per cent at present.