China Overseas Land posts smallest operating profit this year
HONG KONG (Reuters) - China Overseas Land & Investment Ltd (0688.HK), the country's largest property developer by market value, posted the smallest quarterly growth this year and forecast the worst is yet to come for the real estate sector.
Premier Wen Jiabao said last week that the government, which has been trying to cool property prices for the past two years, will keep restrictions on the real estate market.
China Overseas Land said on Wednesday it does not expect an obvious relaxation in the government's tightening policies until the middle of next year.
The company, which focuses on mid- to high-end property, posted a 6 percent rise in operating profit in July-September to HK$6.15 billion ($793.5 million), helped by sales in Hong Kong and Macau.
Analysts contacted by Reuters said they did not forecast third-quarter or nine-month results.
"The company would not do as well in the first half of next year," said Credit Suisse analyst Jinsong Du, expecting sales growth to slow in the coming quarters.
Operating profit grew 10.6 percent in the first quarter and 12.4 percent in the second.
Home prices in China were broadly flat in August-September, halting two months of upticks in a sign that government efforts to cool red-hot property prices are working.
Prices gained just 0.01 percent in September compared with August, following monthly gains of 0.1 percent in both August and July.
China Overseas Land's operating profit for the first nine months was HK$18.4 billion, up 9.9 percent from a year earlier.
Its shares, valued at around $21.3 billion, closed the morning session down 1.3 percent ahead of the results, lagging the 0.3 percent rise in the benchmark Hang Seng index .HSI.
($1 = 7.7500 Hong Kong dollars)
(Editing by Ryan Woo)
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