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March 11, 2010

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Gemdale sees 2009 profit double

PROFIT at Gemdale Corp, one of China's largest property developers by market value, more than doubled last year.

Revenue jumped 24 percent to 12.1 billion yuan (US$1.77 billion) while net income surged 111 percent to 1.78 billion yuan, the Shenzhen-based company said in a statement filed to the Shanghai Stock Exchange.

Nationwide, Gemdale sold 1.97 million square meters of new properties valued at 21.08 billion yuan in 2009, an increase of 77 percent and 85 percent respectively, from a year earlier.

"Gemdale's 2009 result outperformed earlier market anticipations and we expect the company to extend solid growth in 2010," said Sun Jianping, an analyst with Guotai Jun'an Securities Co. "In the long run, the country's real estate industry is expected to thrive as urbanization, coupled with people's growing income, will continue to boost market demand for homes."

Across the country, Shanghai, Guangdong and Beijing registered the most sales between January and December, contributing 46 percent, 29 percent and 15 percent of the company's total.

In the future, however, an increasing amount of revenue will be collected from second and third-tier markets as the company has been increasing its land reserves outside of the gateway cities.

The company said it added about 5.23 million square meters of land reserves under 18 projects over the past year with a total investment of 20.6 billion yuan.

This year, Gemdale will have 43 major projects under operation and commence construction on 3.89 million square meters of properties.

Meanwhile, COFCO Property (Group) Co Ltd said its net profit soared 163 percent to 373.5 million yuan in 2009.

Revenue during the period rose 85 percent to 2.01 billion yuan, the company told the Shenzhen Stock Exchange.

China will face considerable pressure caused by rising house prices in the next 20 years as hefty demand persists amid accelerated urbanization and industrialization, Jiang Weixin, minister of housing and urban-rural development, said at a press conference on the sidelines of the annual session of the National People's Congress on Monday.


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