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Property developers see sharp differences in Q1 performance

2013-05-03 09:08 Global Times     Web Editor: qindexing comment

All publicly listed property developers had disclosed their financial performance for the first quarter of this year by Thursday, revealing sharp divisions between the steady growth at large property developers and sliding revenue or even losses at smaller firms.

Out of the 154 listed property companies in China's A-share market, 57 reported either falling growth in net profit or losses for the first three months, according to statistics from Hithink Flush Info Network.

Chongqing-based Cred-Chongshi Real Estate Corp reported losses of 47 million yuan ($7.58 million) in the first quarter.

Beijing-based Cinda Real Estate reported a fall in net profit of 312.08 percent year-on-year, due to increasing debt pressure.

Contrary to the difficulties faced by smaller developers, larger ones are much more secure. China Vanke, the country's largest property developer by market value, reported net profit of 1.61 billion yuan in the first quarter, up 15.6 percent from a year ago.

Poly Real Estate Group and Gemdale Corp achieved net profit growth of 2.09 and 22.56 percent in the first three months, respectively, while China Merchants Property Development reported an 88.79 percent year-on-year increase in net profit to 810 million yuan, mainly due to a dramatic increase in sales.

Despite government measures to rein in the property market, including purchase limits and higher mortgage rates for second and subsequent homes, the market started to warm up in the second half of last year due to pent-up demand.

Meanwhile, the curbing policies have hit smaller companies harder, causing lower cash flow and forcing them to turn to other businesses.

Big developers have several hundred projects in different phases of development, so they can balance risks and maintain cash flow, while smaller ones have fewer projects and are exposed to greater risks, Securities Times reported Thursday, citing a senior manager of a Shenzhen-listed real estate company.

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