Forte Announces 2006 Annual Results Turnover increased by 23.1%

Turnover increased by 23.1%
Net profit attributable to shareholders excluding the effect of negative goodwill and additional LAT provision increased by 74.0%
GFA sold and booked both recorded significant growth and reached historical high

(10 April 2007 Hong Kong) Shanghai Forte Land Co., Ltd. ( Forte or the Group ; HKEx stock code: 2337) announced today its annual results for the year ended 31 December 2006 (the Year ).

For the year ended 31 December 2006, the Group s turnover reached RMB2,532,733,000, representing an increase of 23.1% over that in 2005. The Group s gross profit in 2006 was approximately RMB966,136,000 representing an increase of 14.4% compared with that in 2005. Net profit attributable to shareholders reached RMB481,361,000.

The decrease in net profit attributable to shareholders was mainly due to the increase in profit of approximately RMB216,252,000 derived from the increase in negative goodwill as result of the recognition of the acquisition of two subsidiaries in 2005, while there was no such gains in the Year. Secondly, the LAT prepayments made in the provision as required by the tax authorities during the Year, an additional LAT has been provided for approximately RMB234,588,000.

Excluding the effect of negative goodwill and additional LAT provision, the profit attributable to shareholders was approximately RMB599,107,000, representing an increase of 74.0% as compared with the profit attributable to shareholders excluding negative goodwill RMB344,301,000 in 2005. Earnings per share were RMB0.

194. The Board of Directors declared the payment of RMB 0.04 per share as the final dividend for the year ended 31 December 2006. Together with the interim dividend RMB0.05, the total dividend for the Year was RMB0.09.

Financial Highlights

	For the year ended 31 December		Change (%)
RMB 000 (Audited)	2006	2005
Turnover	2,532,733	2,057,295	+23.1%
Gross profit	966,136	844,748	+14.4%
Net profit attributable to shareholders	481,361	560,553	-14.1%
Net profit attributable to shareholders (excluding the effect of negative goodwill and additional LAT provision)	599,107	344,301	+74.0%
Earnings per share - basic (RMB)	0.194	0.241	-19.5%
Proposed final dividend per share (RMB)	0.04	0.04	--
Total dividend per share for the Year together with the interim dividend (RMB)	0.09	0.11	-18.2%

Mr. Fan Wei, Forte s President, commented, In 2006, the PRC Government further strengthened the macro austerity control measures, and launched a series of macro policies and regulations. The launch of these policies has certain effects upon stabilising the property market. It also provides a sound foundation for the healthy and sustainable development of the property market. As Forte believes that in the long term, the PRC property market is still optimistic, the Company proactively propelled the development of the Company s property development business. During the Year under review, operating results of the Group continued to grow steadily. The Group achieved an aggregate GFA sales of approximately 728,544 sq.m. (including joint ventures where the Group owns equity interest), representing an increase of approximately 71% compared with last year. It not only met the sales target set at the beginning of 2006 and but also recorded historical high of the Group. The Group further extended its nationwide development in the PRC. Six cities commenced property sales, namely Shanghai, Beijing, Chongqing, Nanjing and Wuxi in Jiangsu Province, Wuhan in Hubei Province.

During the Year, the Group has 33 projects under development (including joint ventures where the Group owns equity interest), with a total gross floor area ( GFA ) amounted to approximately 2,754,897 sq.m. (cities outside Shanghai representing approximately 58%), an increase of approximately 33.5% compared to the corresponding period last year.

During the Year, 9 projects with a total GFA of approximately 944,502 sq.m. commenced construction (cities outside Shanghai representing approximately 70%). During the reporting period, 13 projects with a total GFA of approximately 1,109,653 sq.m. completed, an increase of approximately 202% as compared to the corresponding period last year.

Total salable GFA amounted to approximately 1,049,826 sq.m., in which approximately 875,532 sq.m. were booked, representing an increase of 169% as compared to the corresponding period last year.

During the Year, the Group increased its land bank by proactively participating in government tenders and auctions and acquisitions of equity interest in other project companies. The Group s newly acquired land bank during the Year amounted to a total GFA of approximately 850,000 sq.m.. During the Year, other than land bank for residential uses, the Group also increased its land bank for offices, commercial and industrial usages.

This accrual is pivotal to the strategy of the Group s nationwide expansion and sustainable development strategy. In addition to the Group s existing land reserves, as at 31 December 2006, the total GFA of the Group s land bank amounted to approximately 5.59 million sq.m., locating in Shanghai, Nanjing, Wuxi, Wuhan, Chongqing, Beijing, Tianjin, Haikou and Hangzhou.

Looking ahead, Mr. Fan concluded, We are confident of the long-term and healthy development of the property market in China. The Group will leverage on its solid foundation and expand to one or two more secondary cities. We are planning to acquire 1.5 to 2 million sq.m. of land bank in 2007. By consolidating our market position in existing 9 cities, the Group will speed up project development cycle and asset turnover.

Besides, the Group will expand cooperation with investment funds and establish new property development management model. By identifying M&A opportunities in the course of property market consolidation, Forte strives to create the greatest returns to shareholders.