DEVELOPERS POST SOLID GROWTH
Country Garden’s core profit soars 22.3pc while China Overseas Land earnings jumps 13.8pc
DEVELOPERS China Overseas Land & Investment Ltd and Country Garden Holdings Company Ltd yesterday reported solid growth in core profit last year, thanks to robust demand for houses in China’s redhot market.
The companies were the first major developers to report their results for last year after Beijing stepped up moves to cool the market on concerns about a bubble, which could weigh on the developers’ margins this year.
“The group is cautiously optimistic about China’s property market this year. It is expected that policy regulation by the central Chinese government will continue,” said China Overseas Land chairman Xiao Xiao.
“China’s property sales are expected to experience some resistance in the first half as market consolidation accelerates, with the sector overall presenting both challenges and opportunities.”
China’s No. 3 developer Country Garden said core profit jumped 22.3 per cent to 12 billion yuan (RM7.71 billion), beating analysts’ estimates as demand spilled into smaller cities where it focused.
China Overseas Land, the nation’s No. 6 developer by sales, said its core profit rose 13.8 per cent to HK$31.37 billion (RM17.89 billion), lagging expectations after its acquisition of CITIC Ltd’s residential property business.
Despite its cautious optimism, China Overseas Land set a modest sales target of at least HK$210 billion for this year, the same level it achieved last year.
Country Garden, however, said it planned to double its sales this year, thanks to stronger growth in smaller cities and a bigger slate of projects due for completion.
China’s property market, which accounts for about 15 per cent of the country’s gross domestic product, picked up last month after price gains had slowed in the previous four months.
Average new house prices in 70 major cities edged 0.3 per cent higher from January, despite a raft of government curbs aimed at tempering speculation. Reuters