China Vanke, country’s second-largest property firm, reports about 30 per cent increase in first-half profit

China Vanke, the country’s second-largest property developer by sales, said on Tuesday evening that its net profit for the six months ending June 30 rose 29.8 per cent from a year ago, rising to 11.84 billion yuan (US$1.7 billion) from 9.12 billion yuan.

The growth in net profit was also higher than the 24.9 per cent year on year it recorded during the first half of 2018. Its total revenue for the first half increased by 32.9 per cent to 139.3 billion yuan from 104.9 billion yuan a year ago. Contracted sales in the period from its property development business rose 9.6 per cent year on year to 334 billion yuan, up from 304.7 billion yuan.

As last year, the company did not declare an interim dividend.

The increase in Vanke’s interim profit comes amid a cooling in China’s frenzied housing market. The average cost of a new home rose by 0.59 per cent in July, the slowest increment in five months, while nine of the 70 cities monitored by China’s National Bureau of Statistics did not record any increases at all. The average cost rose by 0.66 per cent in June, and by 0.71 per cent in May, according to the bureau.

More importantly, Beijing has sent a clear message it will not ease the administrative and regulatory curbs the industry faces, despite domestic output growing at its slowest quarterly pace in three decades amid the ongoing US-China trade war.

“Austerity measures on the industry continued in accordance with the principle of ‘houses are for accommodation, not for speculation’. Local governments had set their regulatory objectives with an aim to stabilise land premium, housing price and expectation,” Vanke said in its report on the first half period.