Cost focus helps Country Garden and China Resources Land boost margins
Strategyhelps Country Garden and China Resources Land boost net profit margins for first half as rivals struggle amid downturn
Controlling costs helped mainland developers Country Garden Holdings and China Resources Land improve their net profit margins for the first half, bucking the industry trend in a market downturn.
Country Garden's net profit margin rose to 14.2 per cent from 11.7 per cent from the previous period while China Resources Land's climbed to 13.3 per cent, slightly higher than the 12.7 per cent for the same period last year and 13.2 per cent for the whole of last year, according to the interim reports of the developers.
Like their rivals, the two developers face uncertainties over meeting their annual sales targets this year given the slump in the market.
Country Garden has targeted 128 billion yuan (HK$161 billion) and China Resources Land, 70 billion yuan, for the year.
Country Garden said it planned to launch 37 projects in the second half, up from 22 in the first six months. In the first seven months, its contracted sales reached 65.03 billion yuan.
The group is confident [it will hit] its full-year contracted sales target
"I believe we can hit the target," said Mo Bin, the company's president and executive director, after it reported a 14.1 per cent rise in core net profit, which excludes property revaluation gains, to 4.7 billion yuan.