Name: SCMP
Telephone: +852-2680-8888

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Pearl Liu

China Evergrande, the country’s third largest property developer by sales, posted a 45 per cent plunge in first-half core profit on Wednesday, becoming the first among the mainland’s top 10 developers to report a decline in earnings.
The sharp fall in core earnings – its first drop since the first half of 2016 – came after the central government rolled out a slew of cooling measures to curb property price growth earlier this year.
Interim core profit came in at 30.35 billion yuan (US$4.2 billion), while revenue dropped 24.4 per cent to 226.98 billion yuan in the comparable period.
Xia Haijun, vice-chairman and president of Evergrande, said that the cooling measures initiated by the central government was not aimed at bringing about a large scale decline in home prices or shrinking the housing market.

“At such a critical moment in the trade war, a stable housing market is very important to China’s economy,” said Xia.
The property sector – a key pillar of China’s extraordinary growth over the past four decades – contributes 25 per cent of China’s domestic economic output, including all the sectors along its supply chain, such as cement and steel, according to Moody’s Investors Service.
“The government’s message to the developers is that they should give up their illusions of a runaway increase in home price and raking billions of dollars,” Xia said.
Evergrande, Country Garden among Chinese developers cutting prices to boost sales, further weighing down sluggish economy
He said that Evergrande will be a “model student” and closely follow the government’s message on housing.
On August 20, Evergrande became the first builder to launch a nationwide campaign to cut prices, offering discounts of up to 22 per cent at its 532 projects.
Even before the impact of the discounts are likely to be felt in the second-half earnings, Evergrande reported a 7.4 per cent drop in contracted sales for the first half.
The builder only managed sales of 281.81 billion yuan in the six months to June, accounting for less than half the company’s 600 billion yuan annual sales target.
Xia admitted that China’s housing market had reached its peak last year at 15 trillion yuan.
“The pie is only this big and will not become any bigger. For developers, the opportunity lies in grabbing a bigger market share,” Xia said, adding that the top three developers will account for 20 per cent of the market, up from current level of 13 per cent.
No interim dividend was recommended.
Despite the sales shortfall, the company said it was confident that it could achieve its annual sales target of 600 billion yuan.
“We can definitely meet the target as 74 million square metres will be put on sale in the next half,” said Xia. “If we manage to sell 40 per cent of this area, the sales target will be met.”
Evergrande’s net gearing ratio, a measure of equity to debt, stood at 152.1 per cent, up from 151.9 per cent at the end of 2018, up 24 percentage points from six months earlier, according to a company filing to the Hong Kong stock exchange.
Xia had pledged last year to cut the net gearing ratio to 100 per cent by the end of 2019 and to 70 per cent by 2020.
Separately, Shui On Land said that its net profit rose 8 per cent to 1.33 billion yuan for the six months to June on improved profit margin and stronger rental income.
“Looking ahead, we will maintain a prudent approach in view of the lingering trade tensions and other uncertainties in the global market,”said Shui On’s executive director Stephanie Lo Bo-yue, the daughter of chairman Vincent Lo Hong-sui and his likely successor.
Additional reporting by Holly Chik


Shimao slashes Hong Kong Sheraton hotel price by 25% to speed up restructuring

Builder Jinke Property reveals details of court-supervised debt restructuring plan

Dubai developers escalate efforts to sell properties to rich Chinese, seeing ‘huge potential’

China property flare-ups resurface as crisis enters fifth year

China property

China Evergrande first major mainland developer to report profit decline as cooling measures hit sales

China Evergrande is the third-largest property developer on the mainland by sales. Photo: Reuters

Xia Haijun, Vice Chairman of the Board and President, China Evergrande Group at the China Evergrande 2018 Annual Results Announcement held at Island Shangri-La Hotel in Admiralty. 26MAR19 SCMP / Nora Tam

China Evergrande targets modest sales growth for 2019 amid weak outlook for property market

Apartment blocks under construction on the outskirts of Beijing. The outlook for China’s property market has dimmed. Photo: Reuters

Highly indebted mainland developer China Evergrande to pay double-digit interest on US dollar bonds

China Evergrande said its offshore units will be issuing US dollar denominated bonds. Photo: Reuters

Hui Ka-yan, Chairman of the Board of China Evergrande Group, attends the China Evergrande Group 2017 Annual Results at the Four Seasons Hotel in Central. 26MAR18 SCMP / David Wong

Business

Property

Hong Kong & China

Companies

China Business

Investor Relations


The country’s third-largest property developer reports its first profit decline since H1 2016
Sales ease 7.4 per cent in the first half as cooling measures bite



The country’s third-largest property developer reports a 45 per cent decline in first-half core profit – its first decline since H1 2016.


Hong Kong company reporting season

Shui On Land

China Evergrande first major mainland developer to report profit decline as cooling measures hit sales

The country’s third-largest property developer reports its first profit decline since H1 2016 Sales ease 7.4 per cent in the first half as cooling measures bite

The country’s third-largest property developer reports its first profit decline since H1 2016

Sales ease 7.4 per cent in the first half as cooling measures bite