China Vanke Co says profit fell 5.2 per cent to 59.74 million yuan (about HK$55.59 million) in the first half despite increased earnings from the sale of equity investment. The B-share company, listed on the Shenzhen Stock Exchange, said it had an exceptional profit of 15 million yuan from equity sales involving a 59 per cent stake in Shenzhen C'estbon Food and Drink Co. Vanke bought the stake two years ago for nine million yuan. Turnover dropped 28 per cent to 487.6 million yuan, from 677.5 million yuan a year earlier. Company secretary Xiao Li said Vanke sold about 80,000 sq metres of floor area in the first half, down about 6 per cent from the same period last year. Operating profit fell 9.6 per cent to 64.14 million yuan, from 70.96 million yuan. Ms Xiao said profit margins were squeezed as property prices were cut to attract buyers. The proportion of unsold flats fell to 15 to 20 per cent, from 30 per cent a year ago. Earnings per share dropped 17.3 per cent to 19 fen from 23 fen. Chairman Wang Shi expected a recovery in property sales in the second half and said more favourable returns could be generated as other phases of Vanke City Garden were completed. He said market sentiment had revived the residential property market in Shenzhen. 'The percentage of residential properties bought by the private sector has reached 85 per cent, an indicator which shows that the Shenzhen property market has become more developed,' he said. 'To capitalise on this trend, the group will further develop its property development business, with a special focus on Shenzhen.'
