Poly Property to step up sales drive to meet annual target

Poly Property Group said yesterday it would speed up sales in the second half to hit its full-year target of 28 billion yuan (HK$35.3 billion) and maintain a gross profit margin of 25 per cent.

Chairman and managing director Xue Ming reaffirmed the company's mainland parent Poly Group's plan to merge it with Poly Real Estate, which is listed in Shenzhen. He gave no timetable or details.

Poly Property shares fell 1.4 per cent to end at HK$3.53 yesterday after it reported a 42.2 per cent drop in first-half attributable profit to HK$1.13 billion. Rising cost of sales and finance and lower revaluation gains from investment properties were blamed for the sluggish results.

The company would redouble efforts to sell down its stock of luxury homes through better marketing and more flexible prices, said deputy general manager Ye Liwen.

"We had completed yet unsold homes worth 14.5 billion yuan [as at the end of June]," Ye said. "We will mainly produce homes for end users in the future and the inventory level should improve."

Most mainland developers are seeing profit margins squeezed by the rising cost of land and labour, but Poly Property is among the minority to post lower profits in the first half.

Turnover rose 8.2 per cent to HK$11.2 billion, but the cost of sales jumped 17.7 per cent to HK$8.4 billion. Finance charges rose 57.6 per cent to HK$415 million and gross profit fell 12.7 per cent to HK$2.8 billion.