CHINA Overseas Land and Investment will use part of the proceeds from December's US$125 million convertible bond issue to fund its investment in a thermal power plant in Shaoguan, in northern Guangdong. Chairman Sun Wenjie said the company was cash-rich for its business diversification, adding that the acquisition of a majority stake in the Shaoguan Pingshi plant was a good investment. Noting that the plant would be profitable after the first two years of operation, he said the company would recoup its investment within five years. Total investment is estimated at $117 million, with China Overseas Land paying about $61.4 million for its 52.5 per cent interest. The Pingshi plant was the company's first electric power project, he said, and it hoped to accumulate experience and human resources to expand in this sector. The company would explore opportunities to invest in new or existing power plants in China, he said. But Mr Sun said investment in power plants would constitute a relatively small portion of the group's overall business. ''Our core business remains property, particularly property investments and developments in Hong Kong,'' he said. Mr Sun said the sharp rise in luxury residential prices in recent months had surprised him, but he expected there was still room for further price increases in the sector because of the imbalance in demand and supply. He said the company would continue to focus its property business in the residential, commercial and office sectors. The group acquired nine new development sites in 1993 - six in Hong Kong, two in Shenzhen and one in Guangzhou - with a total gross floor area of 2.5 million square feet. At the end of last year, the group had 19 projects on hand involving nearly four million sq ft of floor space in Hong Kong, with an estimated capital commitment of up to HK$4.6 billion.