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Mainland property firm China Overseas Land & Investment yesterday posted a better-than-expected 56 per cent increase in 2004 net profit as property markets in Hong Kong and the mainland improved.

The company also said it hoped to raise 1-1.5 billion yuan (US$121-181 million) by spinning off its 79-per-cent owned mainland real estate unit on the Shanghai stock exchange.

"We are waiting for an approval from the China Securities Regulatory Commission," Chief Executive Officer Kong Qingping told reporters in a results briefing.

China Overseas recorded a net profit of HK$1.08 billion (US$138.5 million) for the year ended December 31 against a consensus forecast of HK$827.58 million, according to Reuters Estimates.

The company earned HK$688.92 million in the same period in 2003.

It proposed a final dividend of HK$0.04 per share, up from HK$0.03 the previous year.

The 2004 net also included a write-back of HK$352 million on two luxury property projects in Hong Kong, up 59 per cent from the previous year.

China Overseas' bulk investment developments are located on the mainland. Property development there contributed HK$907 million pre-tax profit to the group, up 78 per cent from a year earlier. Chairman Sun Wenjie will become the honorary chairman of the Hong Kong-listed firm and Kong will replace Sun as chairman. Sun said he would like to focus more on the ongoing restructuring of the company's State-owned mainland parent, China State Construction Engineering Corporation. He is also the chairman of the parent company.

China Overseas shares ended up 1.68 per cent at HK$1.82 yesterday.