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Sandy Li

China Resources Land aims to  increase the completion of residential gross floor area over the next two years despite falling  transaction volumes amid  tough government measures to  slow rising home prices.
This year, the company plans to raise  its flat completion area  188 per cent from  last year to 1.3 million square metres this year, and  to 2.4 million square metres next year.
The aggressive target comes after CR Land posted net profit  growth of 66.7 per cent to HK$1.43 billion for the year to December,  buoyed by the strong mainland  market.
The result was better than an average  forecast of HK$1.12 billion from 11 analysts polled by Thomson Financial.
The company declared a final dividend of 7.4 HK cents, up 45.09 per cent from 5.1 HK cents a year  earlier.
Turnover rose 44.3 per cent, year on year to HK$5.68 billion.
'We are confident that we  can achieve  our target,' said CR Land managing director Wang Yin.
Forty-four per cent of the 1.3 million sq metres  had been pre-sold so far, said Mr Wang without disclosing the  revenue raised.
Citigroup analyst Tony Tsang  said in a research report  that the firm had already fetched about HK$4 billion in sales revenue as  of last month.
He  said CR Land would generate   sales of HK$8.6 billion  this year, assuming it completed a residential area of one million sq metres.
Adding  a forecast of HK$1.1 billion in rental income, he estimated that more than 50 per cent of earnings for this year  had been locked in.
'This represents high earnings visibility,'  said the Citigroup report.
CR Land investment relations department manager Cheng Chau-ping said the company's  projects  achieved an average selling price of  9,000 yuan per square metre last year, up 33.33 per cent from 2006.
Mr Wang said he saw a decline in property transactions in the mainland market, and prices in Shenzhen and Guangzhou also being adjusted lower.
'But we do not have projects in  those cities. We have no plan to offer our projects at discounts as property prices in  cities like Beijing are improving this month,' he said.
The company has added 8.2 million square metres of gross floor area to its land bank in cities including Chengdu, Hangzhou, Hefei, Tianjin, Wuhan and Wuxi. By the end of last year, its land reserve increased to 17.79 million sq metres in 16 cities.
Mr Wang said the firm would focus its land acquisitions in major cities such as Beijing and Shanghai.
CR Land shares jumped 6.18 per cent to HK$13.40 yesterday.



CR Land plans to accelerate completion rate