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Peggy Sito

China Overseas Land & Investment has posted better than expected 2007 net earnings of HK$4.18 billion on  high margins and strong sales volume.
Helped by a robust property market in the first three quarters of last year, the company said net earnings  rose 76.29 per cent for the year to December 31, compared with 2006's HK$2.37 billion.
The  result was 9.24 per cent above a Thomson Financial  consensus estimate of HK$3.83 billion.
Chairman Kong Qingping said gross profit margin rose to 45.1 per cent, 10.7 percentage points higher than 34.4 per cent achieved in 2006, while sales  for the year rose 71 per cent to HK$21.84 billion.
Despite  government macroeconomic controls,  the company remained  upbeat in its outlook, with this year's estimated bookable completed properties 37 per cent higher than  2007  at 3.5 million square metres, of which about 40 per cent have been secured according to analysts.
Mr Kong said the company would  target an annual net profit increase of over 20 per cent.
As a mark of its confidence,  Mr Kong said the company this year would replenish its land bank by 4.5 million square metres on top of its existing 21.76 million sq metres.
In the first two months, the company acquired six sites in five cities with an attributable gross floor area of 1.43 million sq metres.
Turnover rose 52.45 per cent to HK$16.63 billion, of which 80 per cent was derived from the mainland. Earnings per share were up 60.28 per cent  at 56.9 HK cents.
Directors declared a final dividend of seven HK cents a share, bringing a full-year dividend of 12 HK cents a share.
Analysts said China Overseas' diversified land bank across more than 20 cities would limit the impact from tightening measures in any particular city.
KGI Securities said in  a research report that capacity expansion would be a key earnings driver and forecast annual completion to reach 5.5 million sq metres in 2010.
CCB International Securities property analyst Cheng Wai-mo expected gross profit margins this year  to fall back to below 40 per cent   due to a national market correction, particularly in  first-tier cities.
He said the company could maintain  profit growth of more than 30 per cent this year.



China Overseas beats earnings expectations