Coun­try Gar­den’s core profit soars 22.3pc while China Over­seas Land earn­ings jumps 13.8pc

New Straits Times - - Business -

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

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