Hopson Development's underlying profit and revenue rose last year, but the company underperformed the mainland property market with weak sales and strained liquidity, keeping it vulnerable to a new industry downturn. Hopson said underlying profit soared 82 per cent to HK$2 billion and turnover surged 58 per cent to HK$15.6 billion. No dividends will be paid. In contrast to robust sales performance by its rivals, Hopson saw a 3.2 per cent decline in contracted sales, while its average selling price dipped 0.3 per cent. Chief financial officer Xie Baoxin attributed the underperformance to a 45 per cent slide in contracted sales in the last quarter of last year, when the firm delayed the launches of projects to make time for a gear-down in its product line from the high end to cater to end-user demand. Contracted sales in the first two months of this year also fell, by 70 per cent to 471 million yuan (HK$588 million), with the average selling price down 22 per cent. The shift, to be completed by Monday, should prepare for a pickup in sales. "We plan an increase of 15 to 20 per cent, but we hope for the better," Xie said. Hopson has 43 billion yuan of projects this year, but aims to sell 30 to 40 per cent only, as 30 per cent of them are still high-end developments which are not expected to be sold quickly now that homebuyers have taken a wait-and-see attitude. Investor concerns about souring corporate and government debts have increased after the first ever onshore default by a solar energy firm and the collapse of a small developer in Ningbo earlier this month. All this happened against a backdrop of the mainland housing market showing signs of cooling off, with some developers starting to cut prices to boost sales in the past few weeks. Mainland developers have been the most active high-yield bond issuers in Asia's capital markets in recent years. Global ratings agency Moody's said developers had raised US$9.2 billion in offshore bonds so far this year. It gave Hopson a B3 rating with stable outlook. The company's cash to short-term debt ratio improved to 69 per cent by the end of last year from 43 per cent in June. But it still lagged far behind the industry average and was in sharp contrast to China Overseas Land & Investment, which had cash on hand 12 times its debt due in a year. Most of Hopson's debt due this year were bank loans and remaining trust loans of more than two billion yuan, Xie said. The company also has 36 billion yuan of unused bank facilities. "We should have no problem repaying debts this year, based on our current operation and estimated cash flow," Xie said.