China Vanke 2012 Profit Rises 30% on Smaller Home Sale Increase

China Vanke Co. (3333), the nation’s biggest developer by market value traded on mainland exchanges, said full-year profit rose 30 percent it sold more small and medium-sized homes that are less affected by government curbs.

Net income climbed to 12.55 billion yuan ($2 billion) in the 12 months to Dec. 31 from 9.62 billion yuan a year earlier, the company said in a statement today. That compares with the 11.95 billion yuan average profit estimate based on 16 analysts surveyed by Bloomberg. Revenue rose 43 percent to 96.9 billion yuan, it said.

About 90 percent of Vanke’s projects were homes of less than 144 square meters (1,550 square feet) in 2012, the company said. That helped it boost sales even as the government maintained property curbs, including tighter lending and restrictions on the number of homes people can own.

“Vanke’s good sales last year definitely helped boost the earnings as it tapped into the first-home buyers, a segment less affected by the government’s curbs,” said Zhao Zhenyi, a Shanghai-based property analyst at Industrial Securities Co., before the earnings announcement.

In almost three years since the government began efforts to rein in property prices, it has raised down-payment and mortgage requirements, imposed a property tax for the first time in Shanghai and Chongqing, and enacted home-purchase restrictions in about 40 cities, while attempting to preserve real demand from homeowners.

Vanke shares rose 4.6 percent to 11.32 yuan at the close of trading in Shenzhen, before the earnings were announced. They have gained 12 percent this year. The Shanghai Stock Exchange Property Index, which tracks 24 developers, advanced 2.8 percent today.

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at bcao4@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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