Update | Citic’s interim core profit flat, supported by earnings from property development

Citic, China’s largest conglomerate and the Hong Kong-listed flagship of state-owned Citic Group, aims to expand its non-financial business so that it will be of a similar size to its financial operations, after it completed recently the acquisition of 227 billion yuan (HK$285.4 billion) worth of assets from the parent.

It would also seek overseas expansion in the property business, including in developing nations, chairman Chang Zhenming told reporters after the company posted flat recurring profit for the first half of the year when one-time gains in the same period last yea were excluded.

“[China’s] property market has huge demand, but this cannot be without limit,” he said. “In a few more years, profitability is bound to decline after years of high growth, so we cannot just limit ourselves to China and must expand into the global market.”

Currently, non-financial businesses accounted for 30 per cent of the entire company’s sales after the acquisition, but only 20 per cent of profit, Chang said.

The company, formerly known as Citic Pacific, completed on Monday its acquisition of 100 per cent of the share capital of Citic Ltd and was renamed Citic Ltd.

It was the largest asset injection ever into a red chip – a Hong Kong-registered firm holding mainland Chinese state-owned assets – with the addition of various new businesses to the Hong Kong unit, including banking, stock brokerage, manufacturing and construction.