方兴地产 2009 中期报告(3)

value gains on investment properties (net of deferred tax) amounted to HK$418.8 million, representing an increase of 17% over the corresponding period of last year. There was a

significant drop in fair value gains on investment properties of the Group for the period

under review as compared to the corresponding period of last year. Given that the effect

of fair value gains on investment properties were taken into account, profit attributable to

owners of the Company was HK$434.1 million, representing a decrease of 61% as compared

to the corresponding period of last year. Basic earnings per share were HK5.40 cents. The

Board of the Company does not recommend payment of interim dividend.

In the first half of 2009, the global economy showed some signs of stabilization. China

took the lead to rebound from the trough in the first half of the year. The GDP growth rate

reached 7.1% and there was a shrinking decline in imports and exports. This shows that

the monetary policies and fiscal policies adopted by the PRC government have achieved preliminary results in stimulating economic growth. Boosted by the stimulus policies and

strong market demand, the PRC property market experienced a strong rebound in the first

half of the year, since the adjustment in the previous cycle which commenced at the end

of 2007. The land market was particularly active in the first half of the year. The residential

property market in Beijing, Shanghai and other first-tier cities reported a substantial increase

in sales volumes and selling prices, and the property development enterprises have resumed

to normal operations gradually. Due to the adverse effect of the global financial crisis, commercial properties in first-tier cities had experienced a decline in rentals and a rise in

vacancy rate. However, as the economy begins to recover, the downward trend in the office

market has slowed down, and the rate of return on investment in office properties in first-

tier cities remains far higher than those in the second- and third-tier cities. In the first half

of the year, China’s hotel industry was confronted with the most severe challenges since the

outburst of SARS. While the hotel industry and the consumers had managed to adapt to

the impact of the financial crisis, they were once again shocked by the sudden outburst of

H1N1 Influenza A. Under the pressure of the dual crisis, the environment for development of

the hotel industry is becoming more complicated with ever increasing market competition. Fortunately, there are also opportunities for growth amidst the crisis. By stimulating domestic

demand and encouraging consumer consumption, the PRC Government has created a

favourable operating and investment environment for tourism in China. Meanwhile, the

rebound in global economies will also help to improve the operations of hotel industry,

which is now on a growth momentum.

During the period under review, capitalizing on the organic development in our three major

business segments and the complementation among themselves, plus the outstanding quality

of our assets, the Group’s risk resistant ability had been well proved, and all its business

segments had achieved good results in an adverse external environment.

3 INTERIM REPORT 2009　FRANSHION PROPERTIES (CHINA) LIMITED