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China Overseas core profit up 9.2% but still lags expectations

Hong Kong

STATE-owned China Overseas Land & Investment posted a 9.2 per cent jump in core profit on Monday as the sector benefited from increases in average selling prices, although the results fell short of market estimates.

Core profit, which excludes revaluation gains, grew to HK$34.3 billion (S$5.7 billion) last year but lagged a Thomson Reuters StarMine Smart Estimate of HK$36.8 billion drawn from a poll of 25 analysts.

Revenue edged up 1.2 per cent to HK$166 billion.

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Many major Chinese property developers are widely expected to book their best-ever profits for 2017 on record sales, as industry consolidation has brought economies of scale that have helped developers minimise the impact of government measures.

China's seventh-largest developer by sales said it is aiming for a 25 per cent increase in contracted sales for 2018, targeting HK$290 billion.

China Overseas Land said in a statement it did not expect there to be any let-up in property regulation.

"Mainland China's policy will accelerate financial de-leveraging and further tightening of loan credit, which will adversely impact sales and cash collections in the property industry," it also said. REUTERS