China's No. 2 property developer by sales reported a 22.8 percent rise in 2018 core profit on Monday, highlighting the current profitability of the sector even though analysts expect rising land costs to slow profit growth in the second half.

China Vanke said it had agreed to sell 262.991 million new H-shares at HK$29.68 apiece in a share placement. The issue price represents a 5.02 percent discount to the previous close.

The new H-shares represent 16.67 percent of the company's enlarged issued share capital of H-shares and 2.33 percent of the total issued share capital as enlarged by the new issue.

The net proceeds would not be used for the development of residential properties, it added.

Shenzhen Metro Group Co Ltd's stake in Vanke would fall to 28.69 percent on completion of the deal, down from 29.38 percent. Shenzhen Jushenghua Co Ltd's stake would be diluted to 14.33 percent from 14.67 percent.

As of Wednesday's close, Vanke's Hong Kong-listed stock had risen 17.5 percent so far this year.

CLSA, China International Capital Corp, UBS, and CMB International are the placing agents.

($1 = 7.8495 Hong Kong dollars)

(Reporting by Donny Kwok; Editing by Stephen Coates)