Shui On Land plans to bring in strategic partners on a number of large property developments in Chongqing and Yunnan province as a way to release capital for new projects and accelerate expansion. The decision came after the firm announced underlying profit last year rose 34 per cent to HK$2.11 billion, including an 845 million yuan (HK$943 million) gain from the sale of stakes in two projects to Trophy Property. The results beat expectations for a 1.64 billion yuan profit in a Thomson Financial poll. The disposal gain included the sale of a 25 per cent interest in the residential project Wuhan Tiandi and a 49 per cent stake in the residential site Shanghai Taipingqiao, for a total of 1.6 billion yuan. Including a 577 million yuan revaluation gain on investment properties, net profit was HK$2.52 billion, up 115 per cent from a year ago. A final dividend of 10 HK cents will be paid. Chairman Vincent Lo Hong-sui said Trophy Property was also interested in participating in the development of residential project Chongqing Tiandi. The project will have a gross floor area of 3.59 million square metres and is due for completion in 2010. 'We will seek strategic partners who will add value to the development, like Trophy Property, which will participate in development with us instead of being just a passive investor,' Mr Lo said. The firm would also line up strategic partners for four projects in Yunnan, he said, adding that Shui On would hold the controlling stakes after the sales. The four projects, with a combined gross floor area of 6.96 million sqmetres, are designated for office, retail, entertainment, cultural and residential use in Kunming, Dali, Lijiang and Diqing. The strategy to forge strategic partnerships to co-develop the projects could improve cash flow and enhance operational efficiency, Mr Lo said. 'The concept not only helps to generate profit by selling stakes in some big projects but also allows us to pursue more new developments.' Tim Addison, the managing director and chief financial officer, said the move was not related to tightened property lending by mainland banks. With a net gearing ratio of 20 per cent, Mr Addison said the firm was in a strong financial position. Capital expenditure for this year would be about 5 billion yuan, he said. Its construction area would rise to 987,000 sqmetres in 2010 from 264,000 this year, he said. Shui On has a land bank of 13.12 million sqmetres in major cities such as Shanghai, Hangzhou, Wuhan, Chongqing, Foshan and Dalian. Shares of Shui On fell 0.28 per cent to HK$7.16 yesterday.