Earnings at Cheung Kong (Holdings) are forecast to have increased 18 per cent last year on improving margins in property sales and a significant contribution from sister company Hutchison Whampoa, analysts say. The blue-chip developer, due to announce its annual results tomorrow, is expected to report net profit of $11.62 billion, or $4.97 per share, for the year to December, according to 18 analysts polled by Thomson Financial. This compared with net profit of $9.82 billion in 2003. 'Cheung Kong's core business would benefit from the upturn in the property market last year, with increasing property sales and rising profit margins,' said Adrian Ngan Wai-hung, the head of regional property research at BNP Peregrine Paribas. Mr Ngan estimated the developer's net profit for last year would reach $11.6 billion. Gross profit margin for Cheung Kong's property sales was expected to increase by as much as 25 per cent from 18 per cent in 2003, analysts said. Projects that presold during the market recovery with a better margin contribution included Banyan Garden in Cheung Sha Wan, Cairnhill in Tsuen Wan and One Beacon Hill in Kowloon Tong. Property sales would contribute about $23 billion to the developer's bottom line, compared with $1.66 billion in 2003, analysts said. 'The rise in overall rents last year will also give a boost to Cheung Kong's revenue from investment properties,' said SHK Financial Group analyst Ken Yeung Hoi-chuen, who is expecting the company to post a profit of $11.4 billion. The property market had a bumper year last year, with home prices rising 30 per cent. Transaction volume surged 40 per cent to 123,480, with a total value of $382 billion - the highest since 1997. Nonetheless, the developer's earnings last year would still be mainly fuelled by its 49.9 per cent-owned associate Hutchison, analysts said. They generally expected the ports-to-telecommunications conglomerate to contribute between $7.5 billion and $7.9 billion profit to earnings, compared with $7.18 billion in the previous year. Shares of Cheung Kong fell 1.44 per cent to settle at $68.25 yesterday. The stock is down 11.94 per cent so far this year.