China Construction 2009 earnings more than double

SHANGHAI: China State Construction Engineering Co said its 2009 net profit attributable to investors including extraordinary items rose 108.7% to 5.73 billion yuan (RM2.69 billion) from its restated 2008 earnings, propelled by a property boom.

The country's top developer and construction firm's net profit excluding extraordinary items jumped 125.8% last year, it said in its 2009 earnings report published on Tuesday (April 20) in the official Shanghai Securities News.

Separate profits for 4Q2009 could not be calculated because the company restated its 2008 earnings without giving a quarterly breakdown.

"In 2009, our company's property development and investment business showed a strong momentum," China Construction said in the report. "Property development and investment business is the most important factor in our company's growth."

The business helped pushed China Construction's operational income up 28.8% to 260 billion yuan, with operational profits jumping 89.5% to 12.7 billion yuan.

China Construction aims to achieve operations income of 300 billion yuan in 2010, it said in the report without giving profit targets. That would mark a more than 15% increase from 2009 operating income.

China, in a move to bolster its economy in the midst of the global financial crisis, announced a two-year stimulus plan in late 2008 that encouraged more construction and property development.

However, a jump in China's already sky-high urban property prices, in particular housing prices, last year alarmed the government, which has since imposed a series of cooling steps, with the latest measures just announced over the weekend.

The clampdown has led some analysts to forecast decreases of China's property prices this year, with some expecting the prices to fall as much as 30% on average. That in turn has pushed down property developers' share prices.

Still, China Construction has remained bullish over the long-term development of China's property market.

"Since around the end of 2010, the government has taken a slew of steps to curb excessive rises in housing prices in some cities, which have exerted a psychological impact on buyers," the company said in its 2009 annual earnings report.

"But in the long run, the property market still has good prospects," it said, citing factors including that the sector will remain a pillar of China's economy and future demand is huge along with the improvement of living standards among Chinese. -- Reuters