Guangdong developer sets higher sales target

Guangzhou R&F Properties, the largest developer in Guangdong province, has shrugged off government measures to cool the property market and set a contracted sales target of 32 billion yuan (HK$39.3 billion) for this year, 6.7 per cent more than last year.

Contracted sales fell 4 per cent to 30 billion yuan last year because of the impact of the government measures to curb the sector, but R&F Properties said it was still confident of lifting sales this year.

'We generated 3.6 billion yuan from contracted sales in January and February, and contracted sales reached 2 billion yuan between March 1 and 18. We can achieve this sales target,' chairman Li Sze-lim said.

Li said the average price of the company's projects would be cut by 5 to 10 per cent this year, but the developer would also reduce renovation costs to maintain its profit margin. Its net profit margin climbed to 17.8 per cent last year from 16.4 per cent in the previous year.

The developer has 39 projects, including five new ones, that will be available for sale this year.

'The [government] regulatory measures will continue this year. But the government is also encouraging developers to build residential flats for first-time buyers. If developers adjust their product types and cut renovation costs, I think all developers can achieve their sales targets,' Li said.

R&F Properties said net profit rose 8.5 per cent to 4.83 billion yuan last year, slightly lagging turnover, which grew 11 per cent to 27.4 billion yuan.

Profit growth was largely powered by property sales, where net profit surged 19.8 per cent to 4.51 billion yuan. The group is also involved in the hotel sector and investment properties.

Its net debt-equity ratio stood at 86 per cent as of December, and its land bank stood at 28.02 million square metres.

Li said the firm would not acquire development sites aggressively this year but would make Beijing, Shanghai and Guangzhou a priority.

The company has proposed a final dividend of 40 fen a share.

R&F Properties closed 0.43 per cent lower at HK$9.30 yesterday.