March 4 (Bloomberg) -- Soho China Ltd., the biggest developer in Beijing’s central business district, said 2013 earnings rose 33 percent as more properties were completed and booked during the year.
Profit excluding property revaluations climbed to 4.44 billion yuan ($722 million), from 3.34 billion yuan a year earlier, according to a statement to the Hong Kong exchange. That compares with the 3.79 billion yuan average estimate of 17 analysts surveyed by Bloomberg News. Revenue fell to 14.6 billion yuan compared with 16.1 billion yuan in 2012.
The company, which traditionally sold most of its projects, in 2012 shifted its strategy toward what it called a build-and-hold model away from a build-and-sell model, to take advantage of more stable and predictable rental income rather than sales proceeds.
“Soho is in a healthy financial condition and their quick-sales strategy has helped,” Samson Man, a Hong Kong-based property analyst at CMB International Capital Corp., said before today’s release. “I’m a bit concerned about their outlook as their strategy of holding more assets is not very clear.” Man rates the stock a buy.
The earnings increase was mainly due to the sale of two buildings in Beijing that was completed and booked last year, Chairman Pan Shiyi said in today’s statement.
Soho China announced last week that it will sell two buildings in Shanghai’s non-prime locations for about 5.23 billion yuan.
Soho posted 4.69 billion yuan of contracted sales last year, it said today. That compared with 9.47 billion yuan in 2012.
Including property revaluations, net income fell to 7.39 billion yuan, or 1.404 yuan a share, from 10.6 billion yuan, or a 1.897 yuan, a year earlier.
Soho shares rose to the highest in two weeks, climbing 1.3 percent to HK$6.05 at close of trading in Hong Kong. The stock is down 9.4 percent this year.
The company will pay a final dividend of 0.13 yuan per share.
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