HONG KONG • Country Garden, China's top property developer by sales, reported a record-high six-month net profit as business in smaller cities continued to boom.
Government curbs to rein in property prices in China have weighed on larger cities, with July showing the slowest growth in home prices since August last year, although business in smaller centres has remained robust.
Country Garden, which focuses on smaller cities, said its net profit rose 39.2 per cent from a year ago to 7.5 billion yuan (S$1.5 billion) over the six months to June, the highest-ever half-yearly earnings.
The company also saw its core profit, which excludes revaluation gains, jump 35 per cent to 7.2 billion yuan. Its revenue for the period rose 35.5 per cent to 77.7 billion yuan, and the firm said it expects further growth in future given a number of pre-sold but unrecognised projects.
Country Garden, which has an internal target to double sales this year to 600 billion yuan, posted 288.9 billion yuan in sales for the first six months, more than double the levels a year ago. This helped the company climb two notches to the top developer spot.
It did not give details on how much of the sales came from its US$100 billion (S$136 billion) mega development in Malaysia, Forest City, but said that the project "has been well received by overseas enterprises and investors".
The company has largely halted promoting the project to mainland buyers since earlier this year, in response to Beijing's moves to stop capital flight into offshore investments.
A Country Garden executive recently told Reuters that the company would struggle to match 2016 home sales this year at Forest City, despite greater marketing outside the mainland.
Forest City accounted for 6 per cent of the group's contracted sales last year.
Among other Chinese developers, Guangzhou R&F Properties reported a 22 per cent rise in its first-half core profit to 2.1 billion yuan, while Soho China saw a 565 per cent jump in net profit to 3.98 billion yuan because of higher valuation gains on investment properties.