Developer sets aside 12b yuan for sites

PUBLISHED : Wednesday, 07 August, 2013, 12:00am
UPDATED : Wednesday, 07 August, 2013, 3:36am

Guangdong-based property developer Country Garden said it planned to spend 12 billion yuan (HK$15.1 billion) on land acquisitions this year.

Chief financial officer Estella Ng said yesterday: "The company has already paid 9 billion yuan for land in the first half. We are also negotiating to buy a number of sites on the mainland, including those in Qianhai and Hengqin [the new special economic zones in Guangdong]."

She said the firm would also look at sites in fourth- and fifth-tier cities rather than limit its acquisitions to major cities.

President Mo Bin said Country Garden had set a target of 62 billion yuan for contracted sales this year.

In the first half, the developer achieved contracted sales of about 33.65 billion yuan, 94 per cent more than a year earlier.

Net profit increased 45 per cent year on year to 4.32 billion yuan in the first half of this year, thanks to strong property sales, the company reported yesterday.

Turnover from property sales jumped 61.27 per cent to 25.74 billion yuan.

Sales surged 60.4 per cent to 3.86 million square metres. However, net profit margin dropped to about 16 per cent from 17.8 per cent a year earlier.

Mo said the decline in profit margin was because of a change in product mix.

Earlier, the developer had been able to buy sites at lower prices, giving it higher margins.

Mo believed the profit margin would be flat this year following the acceleration in development and property sales.

Country Garden plans to launch 17 new projects, including two in Malaysia, by the end of the year. The Malaysian projects are expected to generate 16 billion yuan in sales. Mo expects half of the buyers to be from the mainland.

No dividend was declared for the period.

Shares in Country Garden edged up 0.66 per cent to close at HK$4.61 yesterday.