China Vanke

China Vanke’s first-half profit jumps 36pc

PUBLISHED : Thursday, 24 August, 2017, 9:09pm
UPDATED : Friday, 25 August, 2017, 5:07pm

China Vanke, the country’s second largest homebuilder by sales, posted a 36 per cent rise in its first-half profit, thanks to improved margin of its booked projects.

Net profit grew to 7.3 billion yuan (US$1.1 billion) for the first six months, beating the 6.4 billion yuan forecast of one analyst polled by Bloomberg.

Revenue was down 4.5 per cent to 67.6 billion yuan due to fewer completed projects during the period.

First-half gross margin from property projects grew to 24.8 per cent from 17.6 per cent a year ago, as the company booked a number of projects sold during China’s housing market rebound which started in 2015.

The developer also saved 1.1 billion yuan in tax cost, thanks to tax reform in China that replaced the business tax with a value-added tax.

“The company will put risk control as a priority in the face of tightened liquidity, facilitating cash collection and reducing inventory in the second half,” Vanke said in a statement to the Shenzhen Stock Exchange.

Vanke recently emerged from a 18-month takeover tussle after state-owned Shenzhen Metro surpassed raider Baoneng to become Vanke’s largest shareholder with a 29.38 per cent stake.

Vanke founder Wang Shi stepped down in June as chairman of the company after the battle, handing over the baton to president Yu Liang.

Vanke’s Shenzhen shares dropped 0.7 per cent, while its Hong Kong shares declined 0.9 per cent on Thursday. The results were announced after the market close.

No interim dividend will be distributed.