China Vanke Co., the nation’s biggest developer by market value traded on mainland exchanges, said full-year profit rose 21 percent as it sold more small and medium-sized homes that are less affected by government curbs.
Net income climbed to 15.12 billion yuan ($2.5 billion) in the 12 months to Dec. 31 from 12.55 billion yuan a year earlier, the Shenzhen, China-based company said in a statement today. That compares with the 15.43 billion yuan average profit estimate of 17 analysts surveyed by Bloomberg. Revenue rose 32 percent to 127.5 billion yuan, it said.
China’s home prices rose 12 percent last year, according to SouFun Holdings Ltd., even as the government maintained property curbs and at least 10 cities stepped up policies to tackle rising housing values. About 91.5 percent of Vanke’s projects were homes of less than 144 square meters (1,550 square feet) in 2013, helping it boost sales, the company said.
“The company achieved stable growth in operating results by adhering to its end-user-oriented product positioning and proactive sales promotion,” said Vanke President Yu Liang in the statement.
The Chinese government will curb real estate speculation and investment, while regulating the market differently depending on the city, Premier Li Keqiang said in his work report yesterday at the opening of the National People’s Congress in Beijing. China targets to start construction of more than 7 million units of social housing this year, he said in the report.
“Instead of controlling property price, the government report this time emphasized social housing and increasing supply of normal residential units,” Yu said at a briefing in Hong Kong today. “This is a healthy mechanism in the long-term and we agree with it.”
Home-price growth slowed for a second month in February, according to SouFun, the nation’s biggest real estate website. Average prices rose 10.8 percent last month from a year earlier, compared with 11.1 percent in January.
Full-year contracted sales rose 21 percent to 170.9 billion yuan, Vanke said today. Chinese developers begin selling homes while they are under construction and book profits upon completion.
Vanke had 44.4 billion yuan of cash at the end of December, it said. The company, the first among China’s biggest homebuilders to report full-year earnings, will pay a final dividend of 4.1 yuan for every 10 shares.
The shares jumped 8.3 percent to 7.32 yuan at the close of trading in Shenzhen, before the earnings were announced. They have lost 8.8 percent this year. The Shanghai Stock Exchange Property Index, which tracks 24 developers, advanced 2.3 percent today.
— With assistance by Bonnie Cao, and Moxy Ying