China Overseas Land & Investment, the country’s largest developer by market value, posted a 21.5 per cent rise in full-year net profit on Thursday and said it expected restrictive property policies to remain in place for some time. The state-backed home builder, which continues to prove one of the strongest performers amid a slowdown caused by two years of housing curbs, said profit for the year hit HK$15.03 billion, up from HK$12.37 billion in 2010. “Before the easing or eventual removal of the restrictive policies in the property sector, further softening of home prices and reduction in transaction volume of sales will continue,” the company said in a statement. “The market will undergo rapid consolidation and weak players will be eliminated, while stronger parties will be able to increase their market share,” it said. China Overseas Land, which focuses on higher-priced, higher-margin homes that analysts say leave it with more room to cut prices, said earnings per share for the year were HK$1.839. It set a dividend of HK$0.2 per share. Mainland developers’ shares have rallied since China started easing reserve requirements in October. The company’s stock closed the morning session down 2.9 per cent, lagging a 0.1 per cent drop in the benchmark index, before the results were announced. They were down nearly 2 per cent after the midday break. The shares have jumped about 50 per cent since hitting a five-month low of HK$10.36 on Oct.4. The company’s share price performance is closely watched, investors using it as a proxy for the Chinese property market. Its Shenzhen-listed competitor China Vanke, the largest mainland developer by value of sales, posted a 32 per cent rise in 2011 profit to 9.6 billion yuan on Monday, in line with expectations. It concentrates on lower-priced mass market homes. China Overseas Land, a unit of state-run China State Construction Engineering Corporation Ltd, said on Tuesday contract sales for February hit HK$13.1 billion ($1.7 billion), up 209 per cent from the same month a year ago, after the launch of a project in Hong Kong. Analysts said such a pace of growth was unlikely to be sustained beyond March. “We don’t think the consensus estimate of strong sales and high margins can sustain at the same time,” Jinsong Du, China property analyst at Credit Suisse, said in a research note. China Overseas Land last month set a sales target of HK$80 billion for 2012, having narrowly outstripped the same target last year. That would represent a decline of 8 per cent over its actual contract sales of HK$87 billion for 2011. The company said on Thursday the traditional strong selling season in September and October did not materialise and sales as a whole in the fourth quarter were not satisfactory. Beijing’s austerity measures have honed in on higher-priced homes in the biggest cities, which would suggest better sales this year for mass-market companies like China Vanke and Evergrande Real Estate. Still, large, geographically diversified developers such as China Overseas Land, China Vanke and Evergrande are expected to win business from smaller cash-strapped rivals as home sales slow in China, according to Standard & Poor’s.