Top Biz News

Large property firms to enjoy profits

By Hui Ching-hoo and Pan Zhongming (China Daily)
Updated: 2006-09-20 09:57

Analysts say that property developers with large land reserves and a national presence are expected to defy the mainland's tightenings policies by posting strong earning growth in the second half of this year.

Among more than 30 listed mainland property companies, China Overseas Land, Beijing Capital Land, Guangzhou R&F and China Vanke topped a rating list based on a survey of 10 analysts conducted by China Daily in Hong Kong and Shenzhen.

The majority of public property developers posted strong net profit growth in the first half of 2006, as the impact of a host of cooling-down measures has yet to be felt.

The central government has introduced a raft of measures since April in order to rein in runaway property investment and stabilize property prices.

"The impact was not reflected in companies' first-half balance sheets," said Patrick Chow, an analyst at Taifook Securities in Hong Kong. "But it will certainly become more visible in the second half."

The degree of the impact depends on whether the government will press on with credit-tightening measures and land approval, analysts said.

But not all property developers are likely to succumb to this harsh business environment those with abundant land reserves and a cross-province presence are likely to outperform their peers.