Longfor stock falls on poor results
Developer's first-half core profit falls 22pc with year's sales target at risk
Shares of Hong Kong-listed Longfor Properties fell yesterday after the mainland developer reported a worse-than-expected 22.1 per cent drop in core profit to 2.13 billion yuan (HK$2.67 billion) in the first half as a market downturn hit sales.
The company sold just 40 per cent of its housing stock in the first half, putting it behind a full-year target of 58 per cent, while its net gearing ratio rose to 66.2 per cent as of the end of June from 58 per cent six months earlier.
Expansion of the company's land bank worsened gearing. This year it bought new plots capable of generating 1.92 million square metres of total gross floor space, at an average price of 7,380 yuan per square metre.
"The debt ratio will improve by the end of the year," chairman and founder Wu Yajun said.
Analysts had expected core profit, which excludes non-controlling interests and revaluation gains, to reach 2.71 billion yuan.
The company's stock fell up to 3.5 per cent after the release of interim results, the biggest intraday drop since July 9. It closed the day down 0.73 per cent at HK$10.92.