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China Resources Land's First-Half Net Income Rises 169% on Housing Sales
China Resources Land Ltd., a state- controlled property developer, said first-half profit rose 169 percent after residential housing sales more than quadrupled even as curbs to rein in surging home prices were introduced.
Net income climbed to HK$3.5 billion ($445 million), or 68.7 cents a share, from a restated HK$1.3 billion, or 26.8 cents a share, a year earlier, it said in a statement to the Hong Kong stock exchange today. Residential development revenue jumped 369 percent over a year earlier to HK$11.1 billion, accounting for 89 percent of total sales in the six months.
Chinese restrictions so far this year include higher down- payment and mortgage rates for multiple-home buyers and instructions for lenders to halt third-home loans in areas with “excessive price gains.” The banking regulator has ordered stress tests for lenders to gauge the impact of home prices falling as much as 60 percent in the hardest-hit markets, a person with knowledge of the matter said.
“Those policies and measures have effectively reined property prices from further escalation in some cities,” the company said in the statement. The moves will serve to stabilize the market in the long term, it said.
The developer’s Hong Kong-traded shares rose 1.1 percent to HK$14.84 at the 4 p.m. close. They have declined 16 percent this year, while the Hang Seng Property Index fell 4.3 percent.
Landbank
China Resources had contracted sales of 7.3 billion, a decline of 28 percent from a year earlier, with total area sold of 746,601 square meters (8 million square feet), 34 percent lower from a year earlier, the company said.
The real estate company said it has locked in residential property development revenue of 16.6 billion yuan ($2.4 billion) that will be recognized this year. That amount represents a 31 percent increase over the full-year residential development revenue for 2009, it said.
The company bought five plots of land in Hefei, Zhengzhou, Shanghai, Tianjin and Yangzhou with a total gross floor area of 2.53 million square meters for 6 billion yuan. After acquisitions, its total landbank reached a total gross floor area of 22.61 million square meters.
China Resources will focus on commercial properties going forward, according to the statement. Prices in 70 major cities climbed 10.3 percent in July from a year earlier, the slowest pace in six months.
The developer declared an interim dividend of 9.5 cents a share, a 76 percent increase from a year ago.
To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net
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