SHANGHAI - China Overseas Land & Investment Ltd, a Hong Kong-based builder controlled by the Chinese construction ministry, said first-half profit climbed 35 percent on gains from one-time items and property sales.

Net income rose to HK$6.8 billion ($871 million), or 83.7 Hong Kong cents a share, from HK$5.1 billion, or 62 Hong Kong cents a share, a year earlier, the company said in a stock-exchange filing on Tuesday. Sales rose 25 percent to HK$21.9 billion from HK$17.6 billion, the company said.

The developer's profit rose even as China expanded efforts to control risks of asset bubbles. The cabinet said last month it will rein in residential prices in smaller cities after limiting home purchases in metropolitan areas including Beijing and Shanghai. China is intensifying property restrictions nationwide after developers posted gains in first-half sales and housing transactions climbed 31 percent in June.

"China Overseas' diversified portfolio in both the country's major and smaller cities helped boost their sales performance and the earnings," said Kevin Gin, a Hong Kong-based analyst at Yuanta Securities Co. "Looking forward, the developer has sufficient resources to generate profits from projects."

The company recorded about HK$1.2 billion from two transactions including the sale of interests in three projects to a real estate fund and the acquisition of the control of China Overseas Grand Ocean Group Ltd, it said in the statement.

'Confident' on outlook

The company's Hong Kong-traded stock decreased 3.05 percent to HK$15.92 on Tuesday. However, the shares have gained 11 percent this year, one of the best performer on the Hang Seng Property Index.

The company is "confident" about the medium- and long-term development of China's property market, citing industrialization and urbanization. Property prospects in Hong Kong and Macao are "good", Chairman Kong Qingping said in Tuesday's statement.

China Overseas, which builds homes and offices on the Chinese mainland, Hong Kong and Macao, said operating profit rose 37 percent to HK$10.9 billion. Operating profit from the Chinese mainland increased 29 percent from a year earlier, accounting for 79 percent of the overall result.

The company's contracted sales advanced 82.4 percent in the first seven months from a year earlier to HK$60.3 billion, it said in a statement on Monday. Developers in Hong Kong and the Chinese mainland usually start selling properties while they're still under construction and book profit as the project is being built.

Ahead of target

"The company has already achieved more than half of the year's sales target," said Nicole Wong, a Hong Kong-based property analyst at CLSA Asia-Pacific Markets, who had a "buy" rating on the stock. "China Overseas already operated in those home-purchase restriction zones in the first half, so their earnings in the next half will not be much different."

The developer acquired 16 plots in China in the first half and plans to expand its land bank at low cost in the future.

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