Net income increased to 3.73 billion yuan ($585 million), or 0.34 yuan a share, in the six months ended June, from 2.98 billion yuan, or 0.27 yuan, a year earlier, the company said in a statement to the Shenzhen stock exchange today. Revenue increased 54 percent to 30.72 billion yuan.
Big companies such as Vanke tend to do better in downturns because they’re better at marketing,” Jack Gong, a Hong Kong-based property analyst at Jefferies Group Inc., said before the earnings announcement. “The general outlook for the property market is still tightening with some room for fine- tuning of policies.”
Chinese developers have been cutting prices to boost sales volumes amid curbs the government has maintained for more than two years to cool the real estate market. They include raising down-payment and mortgage requirements, imposing property taxes for the first time in Shanghai and Chongqing, increasing building of low-cost social housing, and implementing home- purchase restrictions in about 40 cities.
Average home prices for Vanke’s homes fell 10.6 percent to 10,380 yuan in the first half from last year, the company said in a separate e-mailed statement today.
The developer’s contracted sales this year will definitely exceed last year as it will start selling more projects in the fourth quarter, Board Secretary Tan Huajie said in the statement.
Contracted Sales
The company’s contracted sales value, based on bookings of apartments before they are built, fell 1.6 percent to 72.9 billion yuan in the first seven months from a year earlier. Sales volume rose 9.6 percent from the same period last year to 7 million square meters (75 million square feet).
“We launched much fewer projects in the first half than a year ago, but with reasonable sales strategy, the company still held up rising sales volume,” Tan said in the statement.
The stock rose 0.7 percent to 8.76 yuan at the close in Shenzhen trading before the announcement, taking its year-to- date gain to 17 percent, compared with a 1.7 percent advance in the benchmark CSI 300 Index, which tracks the 300 most valuable stocks listed in Shanghai and Shenzhen.
Vanke said in May that it will pay HK$1.08 billion ($139 million) for 74 percent of Hong Kong-traded Winsor Properties Holdings Ltd. to expand overseas.
The main purpose of the purchase is “a trial for global expansion, a long-term direction of growth” for Vanke, the company said at the time. It will set up a foreign-business unit in Hong Kong in the second half, according to a posting on June 15 on its official microblog, citing President Yu Liang.
Vanke, the first among China’s biggest developers to report first-half earnings, had 47 billion yuan of cash by the end of June, up 37 percent from the beginning of the year.
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