China’s state-backed developers grow earnings as buyers look for safety in home delivery, shunning troubled builders

Name: Houses built like pyramids go viral in China
Uploaded: 2024-03-21T11:47:39.000Z
Duration: 2 min 4 s
Description: Houses built like pyramids go viral in China

Report cards from Poly Property and China Merchants Shekou showed consumers preferred the safety of state-backed developers

Longfor Group also issued a warning this month, saying net profit probably declined by 45 per cent to 24.4 billion yuan in 2023

2-MIN READ2-MIN

A Poly Group project under contstruction in Dongguan, Guangdong province. Photo: AFP

Yulu Ao

Published: 7:47pm, 21 Mar 2024Updated: 12:18pm, 22 Mar 2024

China’s state-backed developers are generating more profits from residential sales at the expense of weak rivals, indicating buyers are placing greater emphasis on safety in capital and home delivery after the industry cracked under three years of liquidity crunch.

Poly Property Group reported a 77 per cent jump in net profit to 1.44 billion yuan (US$200 million) in 2023 from a year earlier, according to its Hong Kong stock exchange filing on Thursday. Sales increased by 7 per cent to 53.6 billion yuan, it said.

The developer, which is a unit of state-backed and biggest home builder China Poly Group, declared a final dividend of 8.3 HK cents per share versus 4.3 HK cents in 2022.

Earnings at China Merchants Shekou Industrial Zone, the third ranked builder by sales and a state-controlled entity, surged 48 per cent to 6.3 billion yuan last year, according to its exchange filing, despite flattish sales of 293.6 billion yuan.

02:04

Houses built like pyramids go viral in China

China’s property market will remain a “huge market” with a market size of about 1 trillion yuan, local news outlet the Paper reported on Wednesday, citing chairman Jiang Tiefeng as saying at Shekou’s annual meeting with shareholders. There is limited room for further downturn, the report said.

That probably will not apply to the nation’s struggling and debt-laden developers, as homebuyers stayed away from their property showrooms. Reports about their financial troubles and a crackdown by authorities on accounting misdeeds have contributed to another year of slumping sales.