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China Vanke reports slow pace of profit growth in the first half
CHINA Vanke, the country’s largest property developer by revenue, yesterday posted slower profit growth in the first half of 2014 compared with robust gains in the same period of last year.
Net profits edged up 5.55 percent year on year to 4.81 billion yuan (US$782 million) in the first six months, according to a report on the Shenzhen Stock Exchange website. The growth was sharply down from a 22 percent increase in net profits in the first half of 2013.
However, the Shenzhen-based company seems to have recovered partially from its bleak first quarter. In the January-March period, it posted a 5.23 percent year-on-year decline in profits, its first quarterly profit decline since 2002.
The basic earnings per share rose 6.59 percent year on year to 0.44 yuan.
Vanke said first-half real estate sales across China had cooled from last year but still grew steadily compared with figures in 2012.
Despite a decline in sales on the nationwide market, the company adjusted its strategy and achieved 14.6 percent growth in total building area sold in the first half, as well as a 20.6 percent increase in sales revenue.
Small apartments accounted for as much as 92 percent of the commodity housing it sold in the first six months.
China’s real estate companies have felt the pressure of the cooling property sector in 2014. Beijing Capital Land Ltd saw its total building area sold in the first half rise only 1.1 percent from a year earlier.
The sluggish growth of big-shot developers came alongside a host of disappointing indicators for the market. The growth of real estate investment continued to slow in July, latest data from the National Bureau of Statistics released last week showed.
Over the past few months, an increasing number of cities saw a drop in house prices, in part due to policy loosening on purchasing rules.
Many experts have ruled out the possibility of a “hard landing” for China’s property sector. They predicted the sector would recover in the fourth quarter as banks become more lenient on issuing loans amid sufficient credit supply.
In yesterday’s report, China Vanke noted the government’s fine-tuning on the once-sizzling property market has become more targeted and market-oriented.
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