China Resources Land annual core profit up 19.2 per cent, slightly short of forecasts

State-backed developer China Resources Land said its 2015 core profit rose 19.2 per cent to HK$14.21 billion, owing to higher property sales.

In a filing with the Hong Kong stock exchange on Monday, it said turnover saw a year on year 15.3 per cent increase to HK$103.39 billion.

The result was slightly below consensus expectations for a core profit of HK$16.7 billion among 27 analysts compiled by Thomson Reuters.

“The [mainland] property sector shall benefit from supportive policies including moderate monetary environment, the acceleration in new-round urbanisation, further Hukou reform, inventory clearance measures as well as the two-child policy,” China Resources Land vice chairman Tang Yong said in the company statement.

The company declared a final dividend of 48.7 HK cents, up 18.78 per cent from 41 HK cents a year earlier.

China Resources Land, controlling a land bank of 41.26 million square metres in more than 50 cities, said its gross profit margin improved to 31.2 per cent last year, from 30.5 per cent in 2014. About 15 per cent of its land bank is located in first-tier cities.

Commenting on market talk that the Shanghai provincial government plans to slow the processing of approving pre-sale consent in order to rein in price growth, Tang said the measure would have little impact.

“I understand the central government does not want to see an excessive growth in home prices. But the deferral in approving pre-sale consent may reduce new flat supply,” he said.

The firm has set a 96 billion yuan sales target for this year, representing a 13 per cent increase from 85 billion yuan in 2015. Of the total, Shanghai properties available for sale amounted to 8 billion yuan while Beijing properties are targeted at 16 billion yuan.

As of December 31, the group said it had locked in unbooked contracted value of 88.76 billion subject to recognition in from 2016 onwards. About 56.91 billion yuan worth will be recognised this year.

Net profit, including revaluation gains on investment properties, were 15.8 per cent on year to HK$17.53 billion.

Shares of China Resources Land fell 2.4 per cent to close at HK$20.3 on Monday.