Sino Land's net profit climbed 76% to HKD8.1b

But revenue dipped 7%.

According to Maybank Kim Eng, Sino Land reported 1H6/13A net profit growth of 76% YoY to HKD8.1b, on the back of a 7% decline in revenue. Excluding investment property revaluation gains of HKD3.6b net of tax (1H6/12A: HKD2.1b), core net profit rose 81% to HKD4.5b, slightly better than market expectations. 

Maybank adds, SL booked development revenue of HKD3.1b (-16% YoY) while rental revenue rose 9% to HKD1.3b. Gross margins at the development segment contracted 5ppts YoY to 37.9% on product mix changes.

Here's more:

Management is confident that SL will benefit from more land supply in the medium term with its low net gearing of 1.4% (versus 4.1% 6 months ago).

Since 4Q12, it has acquired three land parcels in HK for HKD2.4b. With a target development margin of 20%, SL can become more aggressive in its landbank purchases in HK, without raising the group’s net gearing significantly.

With cash of HKD10.6b and undrawn facilities of HKD8.9b, the group has abundant financial resources of over HKD19b. SL also stressed the relatively low cost of its existing HK development landbank, hence protecting its segment margin on the downside.