March 20, 2018 / 10:52 AM / 7 months ago

Country Garden profit doubles to record, upbeat on struggling Malaysia project

HONG KONG (Reuters) - China’s Country Garden Holdings Co Ltd (2007.HK) said annual core profit doubled to a record on robust domestic sales and was hopeful about a high-profile property project in Malaysia despite a sharp drop in sales to mainland Chinese buyers.

FILE PHOTO: Prospective buyers look at a model of the development at the Country Gardens' Forest City showroom in Johor Bahru, Malaysia February 21, 2017. REUTERS/Edgar Su/File Photo

Many of China’s major property developers are expected to book their annual best-ever profits for 2017, largely shrugging off the impact of Beijing’s tightening measures as they speed up the pace of developments and as they benefit from consolidation in the industry.

Country Garden’s core profit, which excludes non-recurring income and revaluation gains, grew to 24.7 billion yuan ($3.9 billion) on a 48 percent surge in revenue.

Based in the southern Guangdong province, Country Garden ranks as China’s top property developer by sales although those sales figures include total revenue garnered at joint ventures.

Slideshow (4 Images)

But unlike previous years, however, it did not disclose a sales target for the current year.

One area of concern for Country Garden has been its Forest City project in Malaysia, which includes homes, office towers, malls and schools and is touted to worth some $100 billion in investment over 20 years.

Originally geared to appeal to mainland Chinese looking to resettle overseas, sales slid last year to 8 billion yuan ($1.3 billion), compared with more than 10 billion yuan the previous year as China’s capital curbs slammed the brakes on outbound investment.

Chief Financial Officer Wu Bijun said development will not slow down this year.

“We have set up 23 sales offices overseas; we expect to see sales growth this year,” she said.

The developer also said it hopes to capitalize on what it expects will be government efforts to promote the development of long-term property leasing.

Country Garden, which set up a long-term property leasing department late last year, said 3,000 such apartments were under construction in top-tier cities in 2017. It aims to build 1 million apartments to be leased in three years.

Although Beijing introduced more tailored housing measures in cities last year in a bid to control home prices, property development has not let up.

Real estate investment in China over the first two months of 2018 grew at it strongest pace since 2015, with smaller developers rushing to roll out new projects amid a government crackdown on risky financing.

Shares in Country Garden closed up 0.4 percent after the results, in line with the broader Hong Kong stock market .HSI.

($1 = 6.3274 Chinese yuan)

Reporting by Clare Jim; Editing by Edwina Gibbs

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