August 25, 2014 / 3:31 AM / in 3 years

UPDATE 1-China's largest builder says H1 profit up 34.4 pct

* Net profit 11.82 bln yuan vs 8.79 bln yuan yr ago

* Real estate sales down 13.5 pct

* Local authority debt could squeeze land credit (Adds details on outlook)

SHANGHAI, Aug 25 (Reuters) - China State Construction Engineering Corp Ltd (CSCEC), the country’s largest builder, said first-half net profit jumped 34.4 percent to 11.8 billion yuan ($1.92 billion) even though real estate sales plunged from a year ago.

The company said China’s urbanisation would continue to underpin earnings although risks included local authority debt, which could cut land finance, the tightening of national credit policy and an uncertain regulatory environment.

Operating income hit 374.9 billion yuan, an on-year increase of 24.2 percent, according to a filing posted on the Shanghai Stock Exchange on Sunday.

New construction projects rose 9.8 percent to 720 billion yuan, with real estate deals jumping 15.6 percent to 632.3 billion yuan. Infrastructure business fell by 20.8 percent to 82.8 billion yuan.

Real estate sales fell 13.5 percent to 68.2 billion yuan, with the total sales area sold down 21 percent to 5.27 million square metres.

The firm said it aimed to achieve a new annual contract total of 1.2 trillion yuan by year end compared with last year’s half-year target of 1 trillion yuan.

The company’s shares closed at 3.19 yuan on Friday, and have risen by 6.7 percent over the past month. (1 US dollar = 6.1514 Chinese yuan) (Reporting by Engen Tham; Editing by Stephen Coates)

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