The share price of Country Garden Holdings Co. Ltd. (02007.HK) surged on Tuesday afternoon after the company announced it has surpassed its full-year sales goal three months ahead of schedule. By the end of September, contract turnover this year has reached 64.7 billion yuan (US$10.56 billion), 2.7 billion yuan above the annual target.
It is worth noting that Country Garden’s contract sales between January and August was only 51.92 billion yuan. That suggests that in the month of September alone, the residential property developer chalked up a whopping revenue of 12.78 billion yuan.
Country Garden’s red-hot sales growth was due mainly to the launch of several projects in September, which coincided with surging demand after the central government hinted it would not introduce more restrictions to the property market.
According to the Guangzhou-based company, its projects remain sought-after during the week-long National Day holiday. It is almost certain that 2013 will be a bumper year for the developer as there is still ample time for it to boost profit margin further.
As rising tide lifts all boats in the market, don’t be surprised if other players active in southern China such as Guangzhou R&F Properties Co. Ltd. (02777.HK) and Yuexiu Property Co. Ltd. (00123.HK) report their own good news soon.
Following the stock gain on Tuesday, Country Garden is priced at double its net asset value. By comparison, the P/B ratio for Guangzhou R&F Properties is just 1.3 times while that for Yuexiu Property is 0.67 times.
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