Update | China Overseas Land aims to close Citic deal in six months

Property giant China Overseas Land & Investment said it aims to complete the acquisition of assets from Citic, China’s largest state-backed conglomerate, in less than six months as it reported net profit increased 22.5 per cent last year.

The state-owned firm said net profit rose to HK$33.3 billion last year, beating the average estimate for HK$28.9 billion in a Thomson Reuters poll of 25 analysts, helped by expanded sales and the spin-off of its property management business. Revenue grew 6.9 per cent.

At the result briefing on Friday, chairman Hao Jianmin said that as the Citic deal involved asset transfers between the two firms, regulatory approval would take time.

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“Most [of the assets] are in first and second-tier cities [in China], so I believe there won’t be any difficulties selling the projects,” Hao added.

In a statement to the Hong Kong stock exchange on Monday, China Overseas said it would buy property assets from Citic for 31 billion yuan. In return, it would issue 1.09 billion new shares at HK$27.13 each, worth a total of HK$29.72 billion, and transfer 6.15 billion yuan worth of property assets to Citic.

Hao declined to say what type of assets would be injected into Citic.

Analysts said the asset restructuring would benefit both companies amid an industry consolidation.

Hao said: “We have seen more merger and acquisition opportunities in the market. Professionalisation is the trend of the industry.”