China Overseas Land & Investment develops technology ecosystem to create new income source, as first-half revenues beat expectations
- The developer reported that its basic earnings per share slipped 3.7 per cent to HK$1.87, beating analysts’ estimates
- Contracted property sales grew 4.2 per cent to in first half to 172 billion yuan despite no sales for almost two months
China Overseas Land & Investment (COLI) is moving to develop a technology ecosystem to create new sources of income amid a slowing property market, as the developer’s first-half revenues beat expectations.
The company’s strategy is to allocate 2 per cent of its resources to fund new businesses such as elderly living, education, logistics and supply chain management to “foster new sources of profits”, chairman Yan Jianguo said in an earnings teleconference on Monday afternoon. Residential and commercial developments take up the bulk of them.
The state-owned developer hopes to “establish a technology ecosystem” by setting up a new supply chain management company for the construction materials sector and a technology company to digitally manage residential development and business operations, it said in an earnings filing.
“COLI’s prudent expansion strategy could help defend against the softening economic outlook amid Covid-19,” said Patrick Wong, senior research analyst of Asia Real Estate at Bloomberg Intelligence in a note.
The company reported net profits down 3.7 per cent to 20.5 billion yuan (US$2.97 billion) in the six months to June 30, compared to 21.3 billion yuan in the same period of 2019.
Revenues increased 11 per cent in the first half to 88.6 billion yuan, beating consensus estimates of 81.6 billion yuan according to analysts polled by Bloomberg.
Basic earnings per share slipped 3.7 per cent to 1.87 yuan, beating analysts’ forecasts of 1.40 yuan.
“The pandemic has had a big impact on us. We had no property sales for one and a half months,” said chief executive Zhang Zhichao, speaking on the teleconference.
