Evergrande 2012 Underlying Profit Falls 28% on Property Curbs
By Bloomberg News - Mar 26, 2013 4:54 AM ET
Evergrande Real Estate Group Ltd. (3333), China’s biggest developer by sales volume, posted a 28 percent decline in 2012 underlying profit after the developer cut prices as the government implemented property curbs.
Profit excluding valuation gains or losses fell to 6.2 billion yuan ($1 billion) from 8.6 billion yuan, the company said in a statement to the Hong Kong stock exchange today. That compares with the 7.7 billion yuan median estimate of five analysts surveyed by Bloomberg. Revenue jumped 5.4 percent to 65.3 billion yuan.
Evergrande’s earnings declined as home prices were hit the most in China’s less affluent third-tier cities where the Guangzhou, southern China-based company focused its expansion last year. Prices in the eastern city of Wenzhou dropped 11 percent last month from a year ago, leading declines among 70 cities the government tracks.
“The developer had to cut prices to meet sales target last year,” Alan Jin, a Hong Kong-based property analyst at Mizuho Securities Asia Ltd., who has a neutral rating on the stock, said before today’s earnings. “While home prices recovered in major cities, the property markets of smaller cities which it focuses are still lagging behind.”
Evergrande sold a total of 15.5 million square meters (167 square feet) of properties during 2012, up 27 percent from a year earlier, the most among Chinese developers, it said today.
The company started marketing 58 new projects in 52 second and third tier cities last year, it said.
“The group will will maintain strong sales efforts from the beginning of the year, set more proactive internal sales targets monthly, and review and adjust specific sales policy according to market conditions at any time to ensure strong growth in annual contracted sales,” Chairman Hui Ka Yan said in the statement today.
well, here is the choice. keep mum on the direction and operation until next earnings, or, let me know in terms of progress made and adjustment. clearly xin is following the former. because of that, investors also maintain a hold attitude. everyone here knows this and agrees with me, except the difference i make it clear in public.
China Vanke Co. (3333), the nation’s biggest developer by market value traded on mainland exchanges, said full-year profit rose 30 percent it sold more small and medium-sized homes that are less affected by government curbs.
Net income climbed to 12.55 billion yuan ($2 billion) in the 12 months to Dec. 31 from 9.62 billion yuan a year earlier, the company said in a statement today. That compares with the 11.95 billion yuan average profit estimate based on 16 analysts surveyed by Bloomberg. Revenue rose 43 percent to 96.9 billion yuan, it said.