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UPDATE 1-China Overseas Land H1 core profit rises 34 pct
August 1, 2014 / 5:17 AM / 3 years ago

UPDATE 1-China Overseas Land H1 core profit rises 34 pct

* Core profit HK$10.8 bln; net up 18 pct to HK$13 bln

* Tightening step won’t be widely relaxed in short term -chairman

* Shares fall 2.3 pct vs benchmark’s 0.5 pct decline (Adds company comment, context)

By Clare Jim

HONG KONG, Aug 1 (Reuters) - China Overseas Land & Investment Ltd (COLI) said on Friday its first-half core profit jumped 34 percent, but warned of challenges ahead in the industry such as tight liquidity and faster consolidation.

The state-backed company’s core profit during the period was HK$10.8 billion ($1.39 billion), while net profit was HK$13 billion, up 18 percent from a year earlier.

“It is expected that in the short term the tightening measure will not be widely relaxed and the property market in China is confronted with relatively high challenges,” Chairman Hao Jian Min said in a statement.

“Under a market environment with tight liquidity onshore and offshore, market consolidation will proceed at a faster manner. Property developers which are weak in managerial and financial capability and with a high gearing will likely be eliminated.”

Shares of COLI eased 2.3 percent to HK$23.25 before the announcement, underperforming a 0.5 percent fall in the broader market.

Many analysts expected the market to bottom out in the second half thanks to further government stimulus and easier credit, although margins will continue to be squeezed across the board as developers offer discounts to boost sales. ($1 = 7.7498 Hong Kong Dollars) (Editing by Stephen Coates and Christopher Cushing)

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