CHINA Vanke Co Ltd, the country's largest publicly listed real estate developer, said yesterday that net profit rose nearly 24 percent to 2.06 billion yuan (US$300.5 million) in the first half as the result of increased home sales.
Revenue jumped 57 percent to 16.24 billion yuan during the same period, China's biggest residential property developer said in a statement filed with the Shenzhen Stock Exchange.
The Shenzhen-based company reported that it sold 2.658 million square meters worth of new homes across the nation for 24.13 billion yuan between January and June, representing year-on-year increases of 15 percent and 38 percent, respectively.
"Vanke's mid-year performance seems OK, though it was not as good as I expected,'' said Wang Jia, a real estate analyst at Industrial Securities Co. "Business growth for the whole year might slow as market momentum won't likely pick up in the short run.''
The Pearl River Delta, Yangtze River Delta and the Bohai Rim areas contributed 32.9 percent, 29.75 percent and 33 percent of Vanke's first-half revenue, while the Pearl River Delta led all the others in net profit with 44 percent of the total, followed by the Bohai Rim's 33.7 percent and Yangtze River Delta's 17.8 percent, the company said.
The company's land bank has added 3.87 million square meters of gross floor area so far this year, increasing the total GFA of company projects under planning to 19.09 million square meters.
The company also said it had further expanded its national market share to 2.7 percent as of June, after strong efforts to attract first-time buyers seeking mid-to-low-end properties. That figure compared with 2.07 percent at the end of 2007 and 1.9 percent in mid-2007.
For the second half, Vanke said it has scaled back its earlier plan in response to a changing market.
Under the new scheme, the area scheduled to commence construction in the second half will be reduced to 3.5 million square meters, and the area scheduled to be completed during the same period will be cut to 4.29 million square meters.
For the whole year, 6.83 million square meters of GFA space is expected to commence construction, and 5.86 million square meters is set for completion, compared with the 8.48 million and 6.89 million square meter goals set earlier, the company said.
Vanke officials also emphasized that they believe the current sluggishness in the country's real estate market is "a rational adjustment before entering a new development stage as long as the fundamental factors that determine the foundation of the industry are in place.''