For those keeping track, 2013 has been a fruitful year for leading property developers in China. Several firms recorded high double-digit sales growth during the period despite the government’s efforts to rein in home prices. While it remains to be seen whether the high growth will sustain this year, some players are very optimistic indeed about their prospects. Notable among them is Shanghai-based Greenland Holding Group, the parent of Greenland Hong Kong (00337.HK).
Zhang Yuliang, president & chairman of Greenland Group, has said that he expects his group’s property business revenue to reach 240 billion yuan (US$39.7 billion) this year. With that forecast, he has evidently thrown down the gauntlet to rival China Vanke (000002.CN).
Vanke’s sales last year amounted to 171 billion yuan, just about 840 million more than those of Greenland. If the two firms were to top 240 million yuan in sales this year and compete for the title of the No. 1 developer in China, their sales would have to increase by at least 40 percent during the year. The fight will definitely be fascinating, given that Greenland notched a whopping 53 percent growth in sales last year.
Chinese property developers’ report cards for 2013 have shown that they did very well in general, but some firms have stood out in outperformance. Three firms — China Overseas Land & Investment (00688.HK), Evergrande Real Estate (03333.HK) and Country Garden (02007.HK) — saw their revenues pass a key threshold for the first time and enter the “100 billion yuan club”, taking the total number of such club members in the country to seven.
Country Garden had the best performance among the three new entrants, as its sales grew at a scorching 123 percent pace over the previous year.
Industry insiders believe the sector leaders can maintain an average growth rate of over 30 percent as the firms are continuously investing in overseas projects that could yield higher rewards.
Zhang Hongwei, research director of real-estate consultancy Tospur, told Beijing News that the performance of major property developers has been stunning, given the series of tightening policies from the government. The latest report cards indicate that the property market is going to be more concentrated, and the gap between the leading and smaller developers could widen significantly in the coming years.
Smaller developers are also growing, but at a milder pace. Yuexiu Property (00123.HK) offers a good example. The company announced this week that its contracted sales last year totaled 14.6 billion yuan, marking an increase of 19 percent from 2012.
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