Recently, most listed housing enterprises have released annual reports. Seen from overall performance, assets and revenues of housing enterprises have witnessed positive growth during the period. Meanwhile, their profits also increase, discontinuing the common phenomenon with growth in revenues but not in profits several years ago. Industry insiders think that based on the performance of real estate industry in the first quarter this year, many industrial indicators perform well and overall profits of housing enterprises are expected to continue to hike in 2017.
According to Economic Information Daily on April 25, real estate market boomed and most housing enterprises gained positive growth in performance in 2016. Profits of Evergrande Group, China Vanke and Country Garden were more than 300 billion yuan, and those of Greenland Group, Poly Real Estate Group Co., Ltd., China Overseas Property Co., Ltd., Sunac China Holdings Limited, China Fortune Land Development Co., Ltd., China Resources (Holdings) Company Limited and Gemdale Corporation also exceeded 100 billion yuan. Performances of Country Garden, Sunac China Holdings Limited, Future Land Holdings Group Co., Ltd. and Landsea Group doubled year on year in last year.
Based on the latest statistics by Centaline Property on April 24, the data about performance of 96 housing enterprises which have unveiled 2016 annual reports shows that operating revenues of these companies totaled 908.14 billion yuan in 2016, up by 28.5 percent year on year; and their profits reached 88.33 billion yuan, representing a year-on-year growth of 28.9 percent.
“Profits of 96 housing enterprises totaled 88.33 billion yuan with net profit rate of 9.73 percent. Net profits of nearly 80 percent of these housing enterprises hiked.” Zhang Dawei, chief analyst from Centaline Property, said that “the average net profit rate of housing companies was 9.69 percent in 2015 and stood at 9.73 percent in 2016. 73, or 76 percent, of 96 housing enterprises saw growth in net profits. On the whole, real estate enterprises achieved fruitful results in 2016 when policies were the loosest.”
The deregulation on the corporate bonds and the loose monetary policies in 2016 created a favorable financing environment for property enterprises and the financing cost was reduced. An analyst from E&H Corporation indicated that “enterprises have issued long-term bonds in 2016 to repay short-term borrowings, which reduced short-term interest-bearing liabilities and significantly strengthened the overall short-term solvency of property enterprises”.
Based on the statistics of E&H, the total monetary capitals of 80 A-share listed property enterprises were 638.2 billion yuan in 2016, representing an increase of 46.6 percent year on year. The growth in monetary capitals is higher than that of long-term interest-bearing liabilities as a result of the significant increase in the collection of sales in 2016. “The ratio between monetary capitals and short-term interest-bearing liabilities is 1.66 and monetary capitals can fully cover short-term interest-bearing liabilities. It means that property enterprises have no short-term debt repayment pressure.”
“Thanks to the good fundamentals in the property industry, it is expected that the gross profit margin of property enterprises will continue to improve in 2017. Meanwhile, the financial cost is very likely to plunge in 2017. It is expected that the overall profit of property enterprises will continue to improve in 2017,” indicated an analyst from E&H.
Translated by Vanessa Chen and Star Zhang
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