Sino-Ocean aims for 50pc growth

PUBLISHED : Thursday, 11 September, 2008, 12:00am
UPDATED : Thursday, 11 September, 2008, 12:00am

Beijing-based developer Sino-Ocean Land Holdings has set a target of 50 per cent growth in construction area, turnover and profit next year.

Chief executive Li Ming yesterday said a recovery in property sales would not occur until June or July next year.

However, the company's target would be supported by a 10 per cent rise in prices next year and development of more high-end properties.

Sino-Ocean Land targeted next year's contract sales of 10 billion yuan (HK$11.4 billion) to 13 billion yuan and completed floor area of between 1.4 million and 1.5 million square metres.

Because of poor market sentiment, the company has cut the contracted sales target for this year by about 40 per cent to between 5 billion yuan and 7 billion yuan from 8 billion yuan to 12 billion yuan.

Contracted sales dropped 23 per cent in the first half to about 2.33 billion yuan with an average price of 14,209 yuan per square metre.

Mr Li said other than a 20 per cent cut in its project in Zhongshan, no other price cuts were made at company projects in the first half.

Property sales had improved recently and Sino-Ocean Land generated revenue of about 700 million yuan in July and last month, he said.

'Property sales would rebound to last year's normal level in June or July next year,' he added. He expected prices to remain stable or fall slightly and the company would cut prices to boost sales only if necessary.

Chief financial officer Adrian Sun said the prices for any remaining units might be cut by up to 10 per cent.

Mr Li said he would consider developing public housing which would help gain support from the government and boost cash flow.

Profit margins of public housing projects are about 20 per cent.

Shares in Sino-Ocean Land dropped 3.72 per cent to end at HK$2.85 yesterday.