Merrill Lynch expects China Overseas Land & Investments' net profit for the first half of this year to jump to HK$499 million, up 101 per cent from the same period last year. China Overseas will announce its result today.
Merrill Lynch said the developer's HK$330 million gain from the disposal of its Ryoden Development stake in April was believed to be booked in the first half of this year.
The core profit would drop 47 per cent to HK$119 million excluding the Ryoden sale, it said.
In April, China Overseas made a gain on disposal of 244 million Ryoden shares, its entire shareholding in Ryoden Development at HK$1.40 each.
Chairman Sun Wenjie said the shares were acquired three years ago at about HK$3 each. Provisions had been made for the investment during the past three years so the disposal had generated a profit.
Merrill Lynch estimated the drop in core earnings was mainly due to a scale-back in its Hong Kong property development profits.