Leading developers expected to unveil bullish earnings
In the first 2013 earnings estimate released by major developers, Poly Real Estate Group said on Thursday that its 2013 net profit will have surged 27.63 percent yearon-year to reach 10.77 billion yuan ($1.78 billion).
Poly Real Estate, China’s second- largest property developer, is expected to generate 92.3 billion yuan in revenue for 2013, up 34 percent year-on-year.
The Shanghai-listed real estate giant sold 10.64 million square meters of gross space area in 2013, rising 18.11 percent from the previous year, with a total value of 125.3 billion yuan.
Poly Real Estate ended 2013 with a stellar performance in December, according to the firm’s announcement. It has signed purchase contracts of 1.04 million sq m of residential space, up 21.22 percent year-on-year. The contract value totaled 14.2 billion yuan, up 46.2 percent from a year earlier.
Analysts said robust sales in first-tier city property markets will boost earnings results for most major developers.
According to Guangzhounewspaper New Express, China Vanke Co, the country’s biggest property developer, is forecast to post 170 billion yuan revenue in 2013 after selling 14.9 million sq m of space in 2013, skyrocketing from the annual revenue of 100 billion yuan three years ago.
“The 100 billion yuan annual sales club member number has expanded from one in 2010 to seven in 2013 — and the team is likely to have at least one new member in the coming year,” said Zhu Yiming, a research manager with China Real Estate Information Corp.
Listed developers’ sales growth for 2013 should be above 20 percent, according to Dai Fang, an industry analyst with Zheshang Securities.
Dai’s estimate is shored up by the latest figures from the National Bureau of Statistics, which showed that a total of 6.99 trillion yuan of residential properties were sold nationwide from January to November, up 30.7 percent year-on-year.
In Shanghai alone, the sales volume of residential housing in the primary market reached 12.9 million sq m in 2013, up 36 percent from 2012, according to international real estate advisory company Jones Lang LaSalle Inc.
Compared with 2013’s robust sales and ambitious property development, analysts said the coming year will be less dramatic.
Analysts estimate the new tightening measures announced in major cities are likely to weaken market sentiment in the sales market and result in a decline in sales volume in 2014 in both mass and high-end markets.
However, the upward trend in sales prices is not likely to be reversed, although price growth is expected to be limited in 2014.
A slew of local governments issued new property curbs as soaring housing markets put their 2013 pricerise targets ever further beyond the reach of many in late 2013.
Dai expected the nationwide sales growth rate will decline to between 10 and 15 percent this year. Zhu believed most developers will see their profit margins head downward.
“It is likely that a new version of the property tax will be announced in the second half of the year and it will replace the existing tightening policies to play the role of a long-term macro controlling policy for the property market,” said Wu Huimin, director of residential with DTZ East China.