Core profit rises 10.5pc at Yuexiu Property

PUBLISHED : Wednesday, 27 August, 2014, 5:59pm
UPDATED : Thursday, 28 August, 2014, 4:52am

Guangzhou-based developer Yuexiu Property posted a 10.5 per cent year-on-year increase in first-half core earnings to 992 million yuan (HK$1.25 billion) but expects gross margin to fluctuate.

Gross profit margin rose to 34.4 per cent from 28.9 per cent for the full year last year.

Chairman Zhang Zhaoxing said the margin would fluctuate, reflecting the unstable property market in the country.

"But gross profit margins can be achieved in a range of between 20 and 30 per cent; that is still healthy," Zhang said in a news conference to announce the interim results yesterday.

Net profit fell 28.4 per cent to 1.68 billion yuan, mainly owing to a decline from the same period a year earlier in fair-value gains on investment properties.

The board declared an interim dividend of 4.9 HK cents per share.

Yuexiu Property's contracted sales grew 23 per cent year on year to 10.6 billion yuan, 48 per cent of its full-year target of 22 billion yuan.

Including last month's sales, the firm has reached 54 per cent of its target, the firm said.

Average selling price fell to 10,600 yuan per square metre last month from June's 12,700 yuan per square metre.

Zhang said it was hard to predict how much average selling prices would fall, but the company would follow market trends in adjusting selling prices.

Kim Eng Securities expects the developer's core profit to grow 11 per cent for the whole year to 1.55 billion yuan but estimates more than 26 per cent profit growth next year as Yuexiu adopts a flexible pricing strategy.

Yuexiu Property is 49.8 per cent-controlled by Guangzhou Yuexiu, which is owned by the city government.

Shares of Yuexiu Property yesterday fell 1.17 per cent to close at HK$1.69.