UPDATE 1-M.Stanley, Agile develop $3 bln south China resort

(Adds analyst's comment, share price)

HONG KONG, July 4 (Reuters) - Investment bank Morgan Stanley (MS.N) will team up with Chinese property firm Agile Property (3383.HK) to invest $2.92 billion developing a holiday resort on China's Hainan, banking on a tourism boom on the southern island.

Morgan Stanley has agreed to pay Agile 5.3 billion yuan ($774 million) for a 30 percent stake in Crown Golden Investment Ltd, a venture that will develop the project in the coastal area of Sanya, made famous as a venue for the Miss World pageant.

Agile's shares leapt 7.7 percent at the outset on Friday as investors cheered the boost in earnings and its entry into Hainan, a balmy tropical island called "China's Hawaii" that Beijing is attempting to sell as an Asian tourist destination.

Total investment in the project would eventually hit 20 billion yuan, the firm said on Friday. Agile itself will make a profit of about 4.2 billion yuan ($613 million) from the stake sale, to be booked for the full year of 2008, and own the remaining 70 percent of the venture.

The new development would be situated about 40 minute's drive from Sanya's airport.

Agile acquired land for the project at about 300 yuan per square metre, a price that will generate a profit for the firm, said Nicole Wong, an analyst at CLSA, which rates Agile a buy.

Prior to Friday's rally its shares dived more than 37 percent in the month to HK$6.22 on Thursday, hammered by global stock market turmoil and concerns about a correction on China's property market. ($1=6.851 Yuan) (Reporting by Alison Leung; Editing by Keiron Henderson)