Wharf (Holdings) slashes China home sales guidance amid tough operating environment
- Wharf (Holdings) expects to sell US$1.4 billion worth of homes in mainland China, the lowest since US$805.5 million in 2011
- The company’s underlying net profit last year increased by 7 per cent to HK$3.65 billion
Hong Kong-listed Wharf (Holdings) has cut its home sales guidance in mainland China to 9 billion yuan (US$1.4 billion), the lowest in over a decade, amid an uncertain market outlook, low supply and price controls.
This came after its property sales on the mainland fell 20 per cent to 13.9 billion yuan for the year ended December 2021, according to an exchange filing on Wednesday. The company sold 3,625 units totalling 452,000 square metres, which mainly came from projects in Hangzhou and Suzhou.
“For many years, we have not experienced mainland property sales of less than 10 billion yuan,” chairman and managing director Stephen Ng Tin-hoi said at a briefing. “For the past eight to 10 years, we sold over 10 billion yuan [each year].”
The last time the company’s revenues from property sales in China came under 9 billion yuan was in 2011 when sales stood at HK$6.3 billion (US$805.5 million).
“On the one hand, our supply [this year] is lower. On the other hand, we thought the market was weaker than a couple of years ago. This year’s market is definitely not a situation easy to deal with.”
China’s US$1.7 trillion property market has been struggling for the past few months. The value of overall contracted sales at the country’s top 100 developers slumped 47.2 per cent year on year in February to 401.6 billion yuan, according to data from China Real Estate Information Corporation. A month earlier sales had plummeted by 41 per cent. Moody’s expects home sales across the country to fall by 5 per cent to 10 per cent for the whole year.
