Mainland property boom buoys Agile profits

PUBLISHED : Friday, 25 August, 2006, 12:00am
UPDATED : Friday, 25 August, 2006, 12:00am

Agile Property Holdings said its first-half net profit surged 44.3 per cent as the mainland's property market boom drove sales sharply higher allowing the company to cut sales and marketing expenses.

The Guangdong-based developer, which first sold shares in Hong Kong last year, said net profit rose to 580 million yuan for the six months to June, from 402 million yuan a year earlier, while sales jumped 28.1 per cent to 3.05 billion yuan.

Chief financial officer Frank Ng said comparable-sized flat prices rose in double digits but the average flat price gained only 1.5 per cent to 5,873 yuan per square metre as the proportion of smaller flats in its sales mix increased.

Strong demand enabled Agile to cut its sales and marketing expenses to 3.1 per cent of total costs, from 4.4 per cent a year earlier.

The developer has diversified into commercial property and into smaller cities in the province. It completed its first commercial project in Guangzhou this month.

Agile planned to raise the proportion of commercial property to 10 per cent of total sales, chairman Chen Zhuolin said.

The government's repeated efforts to cool the booming property market would have a limited impact on Agile, as the measures were focused on the biggest cities with the most overheated markets, said Tung Tai Securities associate director Kenny Tang Sing-hing.

Agile's focus on secondary cities such as Chengdu and Chungheng would help insulate it from the clampdown, he said.

Earnings per share climbed to 16.7 fen, up 3.7 per cent from 16.1 fen a year earlier.

Agile will pay a dividend of five HK cents a share.