Five Hong Kong-listed Chinese property developers to see big rises in 2017 profit
Surging property sales and rising margins will lift profits, though the effect of property market curbs adds a note of uncertainty
China’s five major property developers are expected to report combined net profits of just over 100 billion yuan (US$15.8 billion) for 2017, thanks to surging property sales, although curbs on the market by the central government could increase uncertainty over the outlook.
China Vanke, China Evergrande Group, China Overseas Land & Investment, Sunac China Holdings and Shimao Property Holdings are due to report their full-year results beginning on Monday.
According to forecasts in a Bloomberg survey, China Vanke is expected to report net profit of 27.46 billion yuan, up 30.7 per cent from 2016, while China Evergrande’s profit is likely to have risen 52.4 per cent to 31.7 billion yuan. China Overseas Land & Investment will see a rise of 13.8 per cent to 28.6 billion yuan while Sunac’s net profit is expected to surge 275 per cent to 5.47 billion yuan. Shimao Property is likely to see a rise of 15 per cent to 7.2 billion yuan.
“In general strong results are well expected, as a result of fast-growing contracted sales as well as higher gross margins reflecting higher property prices and lower financing costs,” said Alfred Lau, a property analyst at Bocom International.
“The same momentum should be seen in 2018 earnings, reflecting the buoyant sales in 2017,” he said.
However one unknown factor for the current year’s earnings would be impact of measures put in place in China to curb runaway housing prices, he added.