Evergrande Real Estate Group Ltd. (3333), China’s third-biggest developer by area sold, rose to the highest in 13 months in Hong Kong trading as investors welcomed the company’s dividend and full-year earnings beat estimates.
The shares surged 4.6 percent to HK$3.83 at the close of trading in Hong Kong, the highest since Feb. 28 last year. That was compared with a 1.6 percent gain in the Hang Seng Property Index. The company said yesterday it would pay a final dividend of 0.43 yuan per share after underlying profit in 2013 rose 66 percent from 2012.
“Such a generous dividend may be welcomed by equity investors,” Barclays Plc Hong Kong-based property analysts, led by Alvin Wong, wrote in a note to clients today. “This should be very bond-unfriendly considering its stretched balance sheet.”
Barclays estimated Evergrande’s dividend payout ratio is at 72 percent, the highest across the industry.
Evergrande’s profit excluding valuation gains or losses rose to 10.31 billion yuan ($1.66 billion) from 6.2 billion yuan a year earlier, the company said in a statement to the Hong Kong stock exchange yesterday. That compares with the 8.6 billion yuan average estimate of 18 analysts surveyed by Bloomberg. Revenue jumped 44 percent to 93.67 billion yuan.
The developer sold the third-most homes by area among Chinese developers, according to China Real Estate Information Corp., or CRIC, a property data and consulting firm. China’s Premier Li Keqiang last year refrained from adding new nationwide property curbs to rein in prices.
Evergrande’s contracted sales rose 8.8 percent in 2013 to 100.4 billion yuan, representing a gross floor area of 14.89 million square meters (160.26 million square feet), it said.
The company reaffirmed its sales target of 110 billion yuan for the year, compared with 100 billion yuan in 2013.
China’s home-price growth slowed for a third month in March. Prices last month rose 10.04 percent from a year earlier, SouFun Holdings Ltd., China’s biggest real estate website, said yesterday.
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