Chinese developer Country Garden sees 2018 core profit jump 38% to new high

Country Garden said in a statement on March 18 that its core profit grew to 34.13 billion yuan in 2018.
Country Garden said in a statement on March 18 that its core profit grew to 34.13 billion yuan in 2018.PHOTO: REUTERS

HONG KONG (REUTERS) - Country Garden Holdings Co Ltd, China's top property developer by total sales, reported core profit for 2018 rose 38 percent to a record, in line with forecasts of analysts, on robust revenue and higher margins.

The results confirm the trend for the sector, with most of the major developers in the country reporting record profits. Analysts, however, said the sector might see earnings growth slow or even profit falls from the second half as more expensive land costs eat into margins on the back of slowing national sales.

China's property sales by floor area fell 3.6 per cent year-on-year in the first two months of 2019, official data showed, while new home prices grew at their slowest pace in 10 months in February in sign of slackening demand as the economy cools further.

Country Garden said in a statement on Monday its core profit, which is net profit excluding non-recurring income and revaluation gains, grew to 34.13 billion yuan (S$6.87 billion) last year.

That compares to the 33.81 billion yuan Refinitiv SmartEstimate. SmartEstimates improve upon the accuracy of the average estimate by placing a higher weight on recent forecasts and on top-rated analysts.

Net profit rose 33 per cent to 34.6 billion yuan, while revenue was up 67 per cent at 379.1 billion yuan.

Country Garden's shares, which have gained 24 percent so far this year, rose 4.4 per cent on Monday prior to the announcement of the results. The broader market was up 0.7 per cent.

In a statement, the company said it will adopt new technologies in its construction and modern agriculture businesses in order to raise competitiveness.