Pan Hong Property Group, the Hong Kong-based property developer that focuses primarily on developing properties in the second and third-tier cities in China, says higher finance cost and tax trimmed net profit to RMB22.9 million ($4.4 million) in the three months ended 30 Sept 2010 (2Q2011), a dip of 3.4% from 2Q2010’s RMB23.7 million.

In the quarter, revenue surged 816.1% to RMB115.2 million from 2Q2010’s RMB12.6 million. The substantial higher revenue in 2Q2011 was mainly due to the sales of a higher number of residential units and car part lots in Hangzhou Liyang Yuan and residential units of Nanchang Honggu Kaixuan Phase 2. The group sold 44 of 222 units at Hangzhou Liyang Yuan and 99 of 844 units at Nanchang Honggu Kaixuan Phase 2.

Other income and gains recorded a sharp decrease of 64.4% from RMB25.2 million in 2Q2010 to RMB9.0 million in 2Q2011. The higher other income and gains in 2Q2010 was due to the compensation income and government grants received during that period.

Wong Lam Ping, Executive Chairman, says, “The astute foresight of our management has enabled us to sell most of our residential units in our projects in the early part of 2010 before further market cooling measures implemented by the PRC government. In the coming few quarters, we will shift our focus to selling our commercial units, which are less affected by the measures.”

On Oct 25, the group announced its intention to spin-off its residential and commercial property development businesses in Jiangxi Province and seek a primary listing of the Jiangxi property business on Hong Kong Stock Exchange.