Photographer: Anthony Kwan/Bloomberg

Evergrande's Core Profit Jumps 250% as Property Prices Climb

Updated on
  • Developer’s revenue more than doubled to 188 billion yuan
  • Company pledges a switch to a new ‘low debt’ strategy

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China Evergrande Group, the developer controlled by billionaire Hui Ka Yan, reported a 250 percent jump in core first-half profit as property sales soared and prices climbed.

Core profit was 27.3 billion yuan ($4.1 billion), the company said in a filing to Hong Kong’s stock exchange Monday. Revenue gained 114.8 percent to 188 billion yuan. Evergrande cited higher selling prices and a jump in sales -- and said it expected to beat a 450 billion yuan sales target for the year. Core profit excludes one-time items.

The company, targeted by short sellers this year for its high debt levels, pledged a switch to low levels of debt, leverage and costs. It targets net gearing of 70 percent from 2020, compared with about 240 percent now, it said.

Evergrande’s share price has climbed more than 370 percent this year, dealing a blow to short-sellers who wagered against the company after its debt soared during an acquisition spree. The gains have been fueled by share buybacks and the firm’s plans for a backdoor listing on the mainland.

Also on Monday:

  • The company was reported by the Securities Daily to be planning to build 15 theme parks in China
  • It declared no dividend, saying that a special dividend would come after the firm’s reorganization
  • CEO Xia Haijun told a briefing he didn’t expect shareholder Chinese Estates Holdings Ltd., controlled by the family of billionaire Joseph Lau, to sell its stake yet as the shares remained cheap
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