Chinese developers set to post strong profits after home prices surge
Analysts see average core profit rising 10 to 20 per cent for 2016 but foreign exchange losses may increase
Hong Kong-listed Chinese property developers are set to post much improved year-end results after house prices skyrocketed in the past two years.
But bigger foreign exchange losses will hit some builders’ bottom line, analysts say, as the majority of developers prepare to announce their 2016 earnings in late March.
The sector’s average core profit, which excludes foreign exchange losses, is likely to expand between 10 per cent and 20 per cent from a year ago, according to four analysts surveyed by the South China Morning Post.
The optimistic forecasts follow a large increase in booked revenue during the period.
China’s property market began to recover in 2015 and hit a peak in August last year, when 64 out of 70 major cities tracked by the National Bureau of Statistics (NBS) reported year-on-year home price growth.