China economy

Country Garden earnings rise 34.4pc

PUBLISHED : Thursday, 03 January, 2013, 12:00am
UPDATED : Thursday, 03 January, 2013, 4:36am


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Mainland developer Country Garden saw net profit rise by 34.4 per cent to nearly 3.85 billion yuan (HK$4.73 billion) in the first nine months of last year.

The Guangdong-based company reported yesterday that net profit margin increased to 16.4 per cent for the nine months to September from 14.9 per cent a year ago.

"The strong growth in net profit was partly because of its poor performance in the corresponding period in 2011," an analyst, who spoke on condition of anonymity, said. "Although the headline figure looks promising, the developer is still facing a challenging market ahead."

According to the latest data from the National Bureau of Statistics, prices of new homes rose in 53 of the 70 mainland cities surveyed in November from the previous month, seven cities stayed flat while 10 cities saw a decline. Year on year, prices were down in 19 cities.

Despite a 29.9 per cent jump in recognised average selling price of properties to about 6,511 yuan per square metre for the nine-month period from a year ago, Country Garden reported a 5.8 per cent drop in total gross floor area to 3.4 million sqm.

Revenue climbed 22.3 per cent to 23.5 billion yuan, primarily from property development.

Shares in Country Garden rose 1.97 per cent to close at HK$4.14 yesterday.

Alfred Lau, a property analyst at Bocom International, said property prices and volume in larger mainland cities had been recovering, driven by end users.

"But the home market in second and third-tier cities is still unstable, with prices still declining. Therefore, developers' profit margins and the asking prices of their projects in these cities will be under pressure," he added.