China's No. 3 developer eyes expansion, 20% net rise

China Overseas Land & Investment Ltd expects net profit to climb 20 percent in 2008 as the country's No. 3 real estate developer spends $4.5 billion to expand its land bank by about a quarter.

Chairman Kong Qingping told reporters on Thursday that the firm will forge ahead with a number of projects even as Beijing tightens its grip on investments and lending nationwide to try curtail a red-hot property sector.

The third-largest of several listed, China-focused developers this year -- including Country Garden and Vanke -- expects to increase its land reserves by 4.5 million square metres (48.44 million sq ft) to 23 million sq metres, Kong said.

Part of that would be achieved through capital spending of HK$35 billion Hong Kong ($4.50 billion). At the same time, Kong reckoned the firm would manage to "easily" notch up property sales of more than HK$35 billion in 2008, based on unit prices over the past year.

"Yes, the domestic policy is one of tightening, but that's not going to slow our progress," he said on Thursday.

China Overseas, which posted a better-than-expected net profit rise of 76 percent to HK$4.18 billion in 2007, has been aggressively expanding its residential property portfolio.

Asked if the Chinese property market was peaking after the sustained upswing of past years, Kong said it was difficult to generalise, and that some segments of the market had actually retraced sharply.

Shares in China Overseas slid nearly 5 percent on Thursday despite its forecast-beating earnings, mirroring a more than 5 percent slide in the index of Chinese corporations listed in Hong Kong.

($1=HK$7.777)