Future of property market lies in China’s small cities, Country Garden chairman says as company’s 2018 core profit beats estimates
- The developer’s core profit rose 38.2 per cent in 2018, against a 126 per cent spike in 2017
Wherever its rural migrant workers will go, Country Garden Holdings, China’s biggest property developer by sales, will follow.
“I think highly of small cities and counties. The future of Chinese [property] lies where thousands of migrant workers will settle down,” Yeung Kwok Keung, 64, the company’s chairman, said during its result briefing on Monday.
Country Garden reported profit slightly ahead of estimates. The Guangdong-based builder’s core profit rose 38.2 per cent last year to 34.13 billion yuan (US$5.08 billion). That just beat the average estimate of 33.8 billion among analysts polled by Bloomberg, but was a far cry from the 126 per cent spike seen in 2017. Its revenue jumped by two thirds to 379 billion yuan, against a 350 billion yuan estimate.
Yeung, born in a farming family, said migrant workers who quit farms for cities, will not go back to these rural areas, and will try to bring their children and families to China’s cities. “However, they cannot afford homes in first or second tier cities. But they can afford homes sold for about 6,000 yuan per square metre in [smaller] counties,” he said.
When asked about the performance of his daughter, Yang Huiyan, who was appointed the developer’s co-chairman in December, he replied “very good” in English. Yeung founded Country Garden in 1992.