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Real Estate
China's top developer posts record H1 profit growth despite increased curbs
2018/08/07 05:44:23
Evergrande, real estate,

Aug 07, 2018 (China Knowledge) - Evergrande Group, China's real estate giant, expects after-tax profit margin to soar over 125% YoY in H1 despite government's intensified efforts to cool down the overheating housing market. Bolstered by the robust H1 performance, Evergrande's H-shares surge as much as 10% on Tuesday.

Evergrande's net profit in H1 is forecast to reach RMB 52 billion (USD 7.58 billion), hitting all-time high. Its H1 sales reached RMB 304.18 billion (USD 44.37 billion), representing an aggregate gross floor area of approximately 29.06 million square meters. These results dwarf its major rivals including Country Garden, China’s largest developer by sales, which posts a H1 net profit growth of 50%.

Evergrande stocks, however, plummet almost 20% in H1 despite its robust profit growth. Its weak stock performance is mainly driven by China's tightening curbs on property speculation. Over the past two months, 9 cities have rolled out new restrictions on real estate ownership, including a lock-in period for new properties and suspension of home purchases by corporations.

In the first half of this year, China's property sales see an increase of 3% in areas, according to a latest report by CICC, China's first JV investment bank. Given the strong sales in real estate industry remain a major driver to China's slowing economy growth, government's move to curb property speculations are likely to remain stable rather than further escalate, say analysts at CICC.

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