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China property

China Merchants Land expects stellar full-year profit

PUBLISHED : Monday, 10 October, 2016, 8:13pm
UPDATED : Monday, 10 October, 2016, 9:57pm

China Merchants Land, the Hong Kong-listed property unit of state-backed mainland conglomerate China Merchants Group, estimated that its unaudited net profit for the whole of this year will be 200 per cent higher than 2015.

The company said the stellar forecast is based on “a significant increase in the total gross floor area of properties completed and delivered” for the year’s first nine months, and the fact that it had booked profit on more projects completed by firms in which it owns majority or controlling stakes.

“The group is expected to record a significant increase in the profit and the profit attributable

to the owners of the company for the year ended 31 December 2016 by not less than 150 per cent

and 200 per cent respectively as compared with the corresponding year of 2015,” it said in a filing to Hong Kong’s stock exchange late on Monday.

The company in August posted a 139 per cent year-on-year surge in revenue to 3.33 billion yuan in the first six months of the year, while net profit jumped 50 per cent to 211.3 million yuan.

After excluding profit belonging to its project partners, net profit attributable to its shareholders slid 61 per cent to 50.5 million yuan.

In the third quarter alone, China Merchants Land recorded a 157 per cent year-on-year increase in contracted sales to 4.57 billion yuan, it said in a separate filing. The total sales area was up 92 per cent to 316,243 square metres.

The units’ selling price averaged 14,465 per square meter in the quarter.

For the first nine months of 2016, total contracted sales leapt 129 per from the same period a year ago to 13 billion yuan, on a 75 per cent rise in sales area. The average unit selling price for the period was 14,124 yuan.

Separately, China Vanke, the mainland’s biggest home builder, reported a 45.7 per cent year-on-year jump in sales to 262.9 billion yuan, as sales area rose 38.3 per cent to 19.92 million sq metres.

For the month of September alone, sales grew 3.9 per cent from a year earlier to 25.38 billion yuan.

And Evergrande Group, another major developer, said in a stock exchange filing that its September contracted sales jumped 323.6 per cent year-on-year to 47.52 billion yuan, with the average selling price rising 16.5 per cent to 9,212 yuan per sq metre. For the year’s first nine months, sales surged 118 per cent from a year earlier to 280.6 billion yuan.

Soaring property prices across China’s have raised fears that a property bubble is forming, and prompted officials of many cities to launch measures to tighten bank loans and restrict sales to would-be buyers.

As a result of the cooling efforts, average daily property turnover nearly halved in the first week of this month, according to China Index Academy, an agency that tracks property prices nationwide.

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