Guoco Group's sale of its 71.3 per cent stake in Dao Heng Bank helped boost its net earnings more than 30 times for the year to June 30. The group, controlled by the Kwek family of Malaysia, unveiled net profit of HK$21.26 billion, up from HK$688 million the previous year in results announced at the weekend. Turnover was up nearly 9.5 per cent to HK$11.9 billion from HK$10.87 billion. Guoco booked an exceptional gain of HK$22.63 billion from the disposal of its controlling stake in Dao Heng to Singapore's DBS Group in April. Some market-watchers believed DBS paid too much to expand its foothold in Hong Kong. The offer represented a high premium of 3.1 times book value. Guoco's share price jumped 11 per cent to HK$38.60 the day after the transaction was announced on April 11 and powered ahead to an historical high of HK$50 in mid-September. It closed at HK$48.10 on Friday. The gain from the disposal increased Guoco's consolidated net assets by HK$20.8 billion. In terms of the phased transaction agreed between the parties, Guoco will remain a minority shareholder of Dao Heng until the end of next year. In its results announcement the group said it still held a 20 per cent interest in Dao Heng Bank. Apart from the one-off disposal gain, Dao Heng Bank was the only contributor to the group's operating profit. During the year, the banking and financing business recorded an operating profit of HK$1.78 billion, compared to a loss of HK$64.59 million made by other operations such as properly development, treasury management, insurance and stock broking. Outlining its future investment strategy after the sale of the core business, Guoco said in its results announcement: 'In the past, a substantial portion of our investment was committed to the development of [Dao Heng Bank]. 'Going forward, the group intends to adopt a more active investment style.' Guoco also said it would carefully assess a variety of industrial sectors 'to identify those that will provide superior overall returns for shareholders'. At the same time, Guoco emphasised that it would employ a conservative cash management process in its investment activities. This was apparent in the weekend profit statement. For example, in spite of the huge profit jump, the group only slightly increased its final dividend payment to HK$256 million from HK$235 million the previous year. Moreover, it also made provisions totalling HK$2.58 billion for its investments. Those conservative measures were aimed at conserving resources in the current uncertain investment market. 'The recent tragic events in America will clearly have far-reaching implications, with economic consequences for the entire global community,' it said. 'These unprecedented events have brought forward the timing of the global economic downturn that we had previously anticipated would occur.' Looking ahead, however, the group expressed confidence the uncertainties would eventually lift and China's entry into the World Trade Organisation would provide good investment opportunities.