Developer Greentown sees dramatic turnaround in fortunes after major disposals
Firm sets up first overseas property unit, which is aiming to complete 10 building projects worth a total 20 billion yuan by 2020
Property developer Greentown China Holdings, on the verge of bankruptcy just three years ago, has registered a storming 103.5 per cent rise in profit to 1.228 billion yuan (US$184 million), after record contracted sales last year.
Its shares, however, slumped 8.6 per cent to HK$ 9.47 by midday in Hong Kong, as the profit largely came from the 1.6 billion yuan disposal gain of two subsidiaries, including one owning serviced apartments in Beijing and two undeveloped land parcels.
The Hangzhou-based company also announced on Monday that its basic earnings per share reached 0.46 yuan, representing a year-on-year increase of 130 per cent. The company didn’t declare an interim dividend.
Interim revenue rose from 9.68 billion yuan in the first half of last year, to 10.45 billion yuan for the same period.
The results mean the wheel has turned full circle for Hong Kong-listed Greentown, which was veering towards bankruptcy in 2014 before state-owned China Communications Construction Group took a majority stake in the business in 2015. It’s recovery means the firm is now considered China’s ninth largest developer, by sales.
Greentown specialises in luxury apartments, and completed a record 96 billion yuan in contracted sales in 2016.
The firm also announced the start of an aggressive overseas investment plan this January despite mainland residents increasingly being blocked from converting yuan into foreign currencies for overseas property purchases.
A statement on the company’s website said it has now set up its first overseas property unit, aiming to complete 10 building projects worth a total 20 billion yuan by 2020.
“The focus will be core cities in Australia [and] North America... such as Sydney, Melbourne, Los Angeles and San Francisco... and Southeast Asian countries,” Cao Zhounan, Greentown’s chief executive said in a statement to the Hong Kong exchange.