Country Garden targets 20pc rise in contracted sales
Country Garden, a Guangdong-based developer, hopes to increase contracted sales by more than 20 per cent to 128 billion yuan (HK$161 billion) this year, while also expanding in overseas markets such as the United States and Canada, senior executives said yesterday.
That growth would represent a sharp slowdown from last year's 123 per cent rise in contracted sales to 106 billion yuan, a figure some analysts remain sceptical about as it was accompanied by a rise in the company's net gearing to 67.3 per cent.
The highest contracted sales contributor last year was Country Garden Danga Bay project in Malaysia, which contributed about seven billion yuan.
"It (Malaysia) has advantages over the domestic market. We don't rule out the possibility of buying more land in Malaysia," company president Mo Bin said. "I have assigned three vice-presidents to look at overseas markets. It's a long-term strategy.
"We will possibly go to the US, Canada and also other Southeast Asian cities, as long as they fit us and have a stable political outlook."
So far, Country Garden has three projects in Malaysia and one in Australia.
Developers, including China Vanke, Greenland Group and Guangzhou R&F Properties, are stepping up their investments in overseas real estate as policy controls in China curb demand.
Country Garden reported a drop of 2.8 percentage points in its net profit margin to 13.6 per cent last year, while revenue rose 49.6 per cent to 62.7 billion yuan.
Rising construction, land and marketing costs as well as an increase in the proportion of flats, which are less profitable than villas, in its product line squeezed the margin, said chief financial officer Estella Ng.
Its mainland rivals face similar problems.