Shimao's net jumps, but weak sales spur cut in R&F's target
Drop in turnover forces R&F to lower the bar in the wake of a price war
Shimao Property Holdings reported a 20.5 per cent jump in first-half net profit yesterday, but falling turnover prompted fellow developer Guangzhou R&F Properties to cut its full-year target for contracted sales by 14 per cent.
Net earnings at Shimao rose to 4.18 billion yuan (HK$5.25 billion) on a 42 per cent surge in revenue from the same period last year to 23.68 billion yuan.
The company will pay an interim dividend of 30 HK cents per share. No dividend was declared a year ago.
Excluding revaluation gains on investment properties, underlying profit rose 21.2 per cent to 3.63 billion yuan.
Shimao vice-chairman Jason Hui Sai-tan said: "Although mainland developers are facing the problem of decreasing profit margin, Shimao's net profit margin dropped only 2.4 percentage points to 17.2 per cent."
He said the company was able to achieve a more robust profit margin because of its better cost control and prime development sites. But he forecast the profit margin would drop slightly in the second half as Shimao tried to boost sales.
The firm generated more than 32.1 billion yuan from contracted sales in the first half. It will launch sales of flats worth 10 billion yuan each month from September to November.
