Kerry Properties, the Hong Kong-based developer controlled by Malaysian businessman Robert Kuok, posted a 44 percent increase in profit last year, thanks to property revaluation gains in the mainland and Hong Kong.

Kerry made HK$4.39 billion in net profit, up from HK$3.05 billion a year earlier.

The stimulus package on the mainland and in Hong Kong boosted real estate markets and prices, leading Kerry to post revaluation gains of HK$2.25 billion, almost triple the HK$822 million one year earlier. As for the coming year, it expects contract sales of HK$9 billion for 2010.

Although the group made less money from its mainland property unit, down to HK$1.49 billion from HK$1.72 billion, Kerry said the abundant liquidity in the mainland market and premier properties in prime locations have attracted keen interest from buyers, noting that the mainland sales during the year were still satisfactory. The company said it expects faster growth on the mainland than in Hong Kong.

"Government action to tighten the incentive policies is expected, and these actions may result in market fluctuations in the short term in the mainland", said Kuok Khoon Chen, Kerry's chairman Wednesday.

Kuok said due to the government's concerns about overheating and consideration of preventive measures, the group now looks out for sites in economically advanced cities for long-term investment value.

Net profit from Hong Kong real estate almost tripled last year, from the previous HK$706 million to HK$2.11 billion in 2009. Kerry said the turnover was mainly contributed by sales of 15 Homantin Hill and SOHO 38 in the Mid-levels, and the disposal of certain property units.

Kerry benefited from Hong Kong's thriving property sales in 2009, when average home prices rose 29 percent due to a supply shortage and low interest rates. The mainland average home prices were also up 24 percent according to the National Bureau of Statistics.

Market experts said Kerry was not very active in the property market last year, and that therefore the revaluation gains making up most of the increase were not surprising.

The company recommended a final dividend of HK$0.4, which together with the interim divident comes to HK$0.7 for the whole year.

Kerry shares closed at HK$38.85 on Wednesday, down HK$1.15 or 2.88 percent, compared to the 1.72 percent increase in the Hang Seng Index.

(HK Edition 03/18/2010 page2)