Beijing Capital targets 66pc revenue increase despite profit fall

Mainland developer Beijing Capital Land has raised its sales revenue target for this year by two-thirds to 20 billion yuan (HK$24.9 billion), despite reporting a 14 per cent decline in underlying profit to 820 million yuan for last year.

The company's president, Tang Jun, said yesterday the group saw 13.3 billion yuan in sales revenues for the year, up 11 per cent on its original target.

Tang said the decline in profit came despite increased sales because average selling prices fell 17.9 per cent to 7,682 yuan per square metre as prices on some projects were adjusted to encourage sales in the market doldrums.

Company chairman Liu Xiaoguang said if significant growth in sales volumes and home prices occurred, there would be an increased chance that the mainland authorities would roll out stronger measures to curb demand and price rises.

"We need to observe home sales this month and next month to see whether tougher measures may be introduced in first-tier cities," Liu said.

The developer said turnover rose 21.4 per cent to 9.13 billion yuan because of an increase in projects completed and occupied during the year, which included the Urban Town, Ballet Town and Chongqing Hongensi projects. But gross margins dropped six percentage points to 27 per cent.

A final dividend of 16 fen per share was proposed, down from 19 fen a year ago.

Luo Jun, the company's vice-president and chief financial officer, said the group had spent 6 billion yuan for land replenishment and would focus on buying residential development sites in first and second-tier cities

The group's gearing ratio was 99 per cent and its cash position was 8.61 billion yuan.

The company's shares fell 6.8 per cent to close at HK$3.29 yesterday.