Country Garden posts record six-month net profit

KUALA LUMPUR (Aug 22): China property developer Country Garden Holdings Co Ltd reported a record high six-month net profit as business in smaller cities continued to boom, according to a Reuters report today.

By focusing on smaller cities, Country Garden said its net profit rose 39.2% from a year ago to 7.5 billion yuan (RM4.82 billion) over the six months to June, its highest ever half-yearly earnings.

The company also saw its core profit, which excludes revaluation gains, jump 35% to 7.2 billion yuan, Reuters reported.

Revenue over the period rose 35.5% to 77.7 billion yuan and Country Garden said it expects more growth in the future owing to a number of pre-sold but unrecognised developments.

The company, however, did not furnish data on how much sales came from its US$100-billion Forest City project in Johor, Malaysia but said "the project has been well received by overseas enterprises and investors", Reuters reported.

Earlier this month, Country Garden Pacificview chief strategy officer Yu Runze said the developer has upped promotion of Forest City beyond China with more showrooms and hiring more Malay and English-speaking sales staff.

The developer is concentrating on new Forest City sales galleries in Thailand, Taiwan and the Philippines this year, and will boost showrooms in Malaysia to 20 from 15 by year end, Yu told Reuters.

"I think this year will be very challenging to surpass (last year's sales)," Yu said. "It is very clear that with a slowing down China market, it will be quite challenging to achieve the same number like last year."

According to a Bloomberg report in June, subsidised junkets that once flew in prospective buyers to development sites in Johor have dwindled.

Meanwhile, Country Garden Pacificview is pushing ahead with the stage 2 development of Forest City, which will add eight sq km to the development, see the completion of tourism, healthcare and education facilities. These include three 18-hole golf courses, a five-star 306-room hotel and a medical centre operated by Taiwanese healthcare management provider MJ Group.

It was also reported this month that Country Garden inked deals with 21 companies to transform the development into a healthcare and recreation tourism hub. The developer said the plan is to develop eight key industries, including tourism, healthcare, education and training, and e-commerce services to serve the region.

Forest City, covering 14 sq km of land on four artificial islands in Johor’s Iskandar Malaysia, had been successful in attracting Chinese buyers by offering affordable prices and access to Malaysia’s visa programme for long-term stays.

Aside from Forest City, Country Garden has three other developments in Malaysia, namely Central Park and Danga Bay, which like Forest City are also in Johor, and Diamond City in Semenyih, Selangor.