YAOHAN International Holdings saw weaker earnings from its core businesses in the year ended March 31. According to the company's listing prospectus, operating profit from its consumer-oriented business dropped 15 per cent during the year. However, net profit for the year was up 189 per cent to $149.73 million, including contributions from associated companies. Group chairman Kazuo Wada said the increased profitability at the net profit level was ''a result of the group's diversification into shopping centre investment as part of its vertical integration''. He said the group would open 1,000 retail outlets in China by the year 2010. In the past year, non-core property and property-based investments generated an operating profit of $135.55 million, or 51 per cent of total operating profit of $263.54 million. Net operating profit from the core divisions - department stores and retailing, catering and bakeries, food processing and trading, and indoor family entertainment centres - totalled $127.99 million, down about 15 per cent from the previous year's $152.12 million. For the year, property and property-based investments had a turnover of $391.85 million, or about eight per cent of the total turnover of $4.42 billion. Turnover from the other sectors netted $4.03 billion, up 30 per cent on the previous year's $3.08 billion. Overall turnover growth was 43 per cent. The company is offering 247.2 million shares at $2.68 each to raise $662.5 million. The new shares represent 25 per cent of its enlarged issued share capital. After the float, it will be owned 75 per cent by Yaohan International, which is about 46 per cent held by Mr Wada's family. Mr Wada said he saw China's fluctuating exchange rates and economic overheating as the greatest challenges for his China-related business.