Tianjin Development to expand in Binhai New Area
Red-chip conglomerate Tianjin Development Holdings plans to expand its mainland financial business to tap emerging opportunities in Tianjin's Binhai New Area.
'Tianjin Binhai New Area has been approved by the State Council as a pilot area for the country's comprehensive financial reforms; we see enormous opportunities here,' executive director Nie Jiansheng said after the port-to-winery conglomerate reported 120 per cent growth in first-half earnings.
Mr Nie said Tianjin Development was exploring investments in commercial banking and insurance, including a possible acquisition of its state-owned parent's 20 per cent stake in Bohai Property Insurance.
He did not detail a timeframe or the size of the stakes it planned to buy in financial institutions, saying only that '3 to 4 per cent is too small; 10 to 20 per cent is more reasonable'.
Mr Nie also said the company had earmarked HK$1 billion to HK$1.5 billion for investment in commercial property, particularly in Tianjin, after its first foray into the sector earlier this year.
The investment arm of Tianjin city government completed the acquisition of two hotels - the four-star Courtyard in Hong Kong and the five-star Hyatt in Tianjin - for nearly HK$1.1 billion this year.
It said yesterday that profit for the six months to June surged to HK$520 million from HK$237 million a year earlier, thanks to a one-off gain of HK$200 million from the purchase of the Courtyard as the fair value was higher than the net assets it bought.
Stripping out the one-off and exchange gains in both years, underlying profit rose 14 per cent, said financial controller and company secretary Patrick Tsang Wai-yip.
The company recorded a HK$106 million net exchange gain in the first half compared with HK$13.3 million in the same period last year, due to the yuan's appreciation.
Tianjin Port Development Holdings contributed HK$88 million to its profit, up 19 per cent year on year.
Its electricity and water operations reported 122 per cent and 37 per cent rise in net profit to HK$53 million and HK$32 million, respectively.
However, profit from its heat and thermal power operations fell 41 per cent to HK$17 million because of soaring costs.
Its two newly acquired hotels reported a combined HK$15 million loss in the first half, but Mr Tsang said conditions would likely improve in the second half.
