Q2 profit up by 43% for Yanlord as Chinese real estate market thrives

A file picture of Yanlord Gardens in Shanghai. PHOTO: YANLORD
A file picture of Yanlord Gardens in Shanghai. PHOTO: YANLORD

SINGAPORE - Yanlord Land Group's net profit surged by 42.8 per cent to 462.5 million yuan (S$94.4 million) in the second quarter, in spite of a 42.2 per cent fall in revenue to 4.3 billion yuan.

The China-based property developer pointed to a lower gross floor area delivered to customers, in line with its delivery schedule, as being behind the turnover decline.

It attributed its improved earnings to a larger share of projects with higher profit margins, as well as a revenue increase from car park sales against the same period a year ago.

Earnings per share for the quarter were 23.88 fen, up from 16.62 fen the previous year, while net asset value was 10.66 yuan against 10.84 yuan as at Dec 31, 2016.

Revenue for the half-year rose 3.3 per cent to 10.6 billion yuan and net profit came in at 1.4 billion yuan, a jump of 139 per cent.

Chairman and chief executive Zhong Sheng Jian said that "sustained homeowner interest for our high-quality developments" was behind "healthy growth in net profit".

He added that Yanlord continues to have faith in the Chinese real estate market's prospects, especially in first- and second-tier cities.

The group noted: "Volatilities in the global financial markets coupled with policy headwinds arising from austerity measures... may serve to slow the rapid growth of new land tender prices and help to maintain a stable and sustainable development of the property sector over the longer term."

It said that barring global economic deterioration or unforeseen circumstances, the board of directors is confident of the group's performance, given the number of pre-sale units to-date, expected delivery schedules and on-schedule construction works in progress.

Yanlord shares closed up 7.5 cents, or 4.3 per cent, at $1.82, before results were announced.