China Vanke Profit Rises on Demand for Smaller Apartments

China Vanke Co., the country’s biggest listed property developer by sales, said profit rose 4.2 percent last year after the government eased property curbs, boosting demand from first-home buyers.

Net income increased to 15.7 billion yuan ($2.5 billion), or 1.43 yuan a share, from 15.1 billion yuan, or 1.37 yuan, a year earlier, the company said in a Shenzhen stock exchange filing based on Chinese accounting standards on Monday. Revenue rose 8.1 percent to 146.4 billion yuan, it said.

Vanke’s focus on small to medium-sized apartments helped it benefit from an easing last year of government policies on first-home purchases as officials sought to revive an industry that had become a drag on growth. Nationwide, new-home sales dropped 7.8 percent last year amid tight credit.

“Faced with a complicated market condition, the company maintained a stable growth in operating results through strengthening quality control and proactive sales efforts,” President Yu Liang said in a press release.

Full-year contracted sales rose 26 percent to 215.1 billion yuan, Shenzhen-based Vanke said. More than 90 percent of the homes Vanke sold were smaller than 144 square meters (1,550 square feet), it said. Chinese developers begin selling homes while they are under construction and book profits upon completion.

The shares rose 4.8 percent to close at HK$18.66 in Hong Kong trading on Monday, extending this year’s rally to 7.9 percent. The company published earnings after the market closed.

China in September broadened homebuyers’ access to lower down payments and mortgage rates that were originally designed for first homes. Cities eased home-purchase restrictions and the central bank has cut interest rates twice since November.

New-home sales recorded the first year-on-year increase in 12 months in December, before falling again in the first two months of this year.

Vanke had 62.7 billion yuan of cash at the end of December, it said. The company will pay a final dividend of 0.5 yuan a share, according to the statement.

— With assistance by Dingmin Zhang, and Bonnie Cao

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