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China Vanke's profits climb 19 pct on record property sales
March 26, 2017 / 11:38 AM / in 5 months

China Vanke's profits climb 19 pct on record property sales

HONG KONG, March 26 (Reuters) - Property giant China Vanke Co , the subject of a long-running battle for boardroom control, said on Sunday its core profit last year rose 19 percent, thanks to record sales.

The nation's second-biggest home builder said core profit, which excludes revaluation gains, rose to 20.9 billion yuan ($3.04 billion) from 17.6 billion yuan in 2015. Analysts were expecting a profit of 21.1 billion yuan according to Thomson Reuters SmartEstimate data.

The property giant has been in crisis since late 2015 as financial conglomerate Baoneng Group built up a 25 percent stake to become its largest shareholder and sought to oust management.

But last week Vanke said state-owned Shenzhen Metro Group, a key ally, became its largest shareholder in terms of voting rights after a proxy agreement with its third-biggest shareholder, paving the way for the metro operator to take control of the homebuilder.

"The group sincerely hopes that the shareholding issue will be resolved as soon as possible, allowing the group to be back on track for normal operations and creating larger values for shareholders and the society," the company said in a statement to the Hong Kong stock exchange.

In a statement to the Shenzhen stock exchange on Sunday, Vanke said Baoneng had promised to maintain Vanke's independence and would not use its position to hurt the developer's interests.

Net profit for 2016 rose 16 percent to 21 billion yuan, while revenue stood at 228.9 yuan, representing a year-on-year increase of 24 percent.

"This year, the central government will continue to implement policies according to cities to prevent market overheating and begin formulating long-term mechanisms for the promotion of steady and healthy development of the property market," Vanke said.

Beijing has been stepping up efforts to cool the property market on concerns about a bubble. Measures have included raising home purchase requirements and imposing price limits on sales.

Chinese developers China Overseas Land & Investment Ltd and Country Garden Holdings Company Ltd last week reported solid growth in 2016 but said there might be challenges for sales in some areas this year due to steps taken by the government to rein in the market.

State-owned China Overseas Land said it was cautiously optimistic about the market and set a modest sales target for 2017, the same level it achieved last year. ($1 = 6.8803 Chinese yuan renminbi) (Reporting by Clare Jim; Editing by Elaine Hardcastle, Greg Mahlich)

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