China Vanke Profit Gains After Government Eased Property Curbs

  • Net income 18.1 billion yuan, estimated 15.7 billion yuan
  • Revenue increased 34 percent to 195.5 billion yuan in 2015

China Vanke Co., the developer in the middle of a tug-of-war for its control, posted a 15 percent increase in full-year profit after the Chinese government eased property curbs to prop up demand for homes.

Net income rose to 18.1 billion yuan ($2.8 billion), or 1.64 yuan a share, from 15.7 billion yuan, or 1.43 yuan a share, a year earlier, Vanke said in a Shenzhen exchange filing based on Chinese accounting standards on Sunday. That compares with an average estimate of 17.9 billion yuan in net income, according to 14 analysts surveyed by Bloomberg. Revenue grew 34 percent to 195.5 billion yuan, it said.

China has loosened property curbs since November 2014 to boost sluggish real estate development that has weighed on economic growth. Sales in the 14 cities where the company derives most of its revenue, including Beijing and Shanghai, “rebounded significantly” last year, China’s biggest listed property developer by value said.

The company proposed a final dividend of 0.72 yuan a share, according to the statement.

Vanke’s shares remain halted in Shenzhen amid a battle for control with its largest shareholder, Baoneng Group, and pending an asset restructuring and share sale. Little-known Baoneng emerged as Vanke’s biggest investor in December, a move that the developer’s management labeled as a “hostile takeover.” The share sale prompted speculation that it was designed to dilute Baoneng’s ownership.

The developer said at the end of last year that it had found a potential investor and was in talks with others. It signed a letter of intent to buy unspecified assets from a potential investor by issuing new shares and using cash, according to a Dec. 29 filing. Vanke has yet to disclose additional information about the restructuring.

Fu Yuning, chairman of China Resources Co., which was Vanke’s previous largest shareholder, said on the sidelines of legislative meetings in Beijing earlier this month that he hoped a “suitable plan” would be found for Vanke’s healthy development.

Anbang Insurance Group Co. raised its holding in Vanke’s Shenzhen-listed shares in December to more than 7 percent before the A shares were suspended. Vanke said it welcomed Beijing-based Anbang as an investor.

— With assistance by Judy Chen, and Emma Dong

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