One of China’s biggest property developers saw sales rise to a record high in 2015 despite a real estate slump that rocked commodities markets the world over. But it’s not all good news.
Revenue at Evergrande Real Estate Group grew 19.5 per cent to Rmb133bn last year, according to the company’s latest annual report, while contracted sales – those that had been inked by the end of December, if not fully completed – grew by 53.1 per cent in 2015 to a record Rmb201.34bn.
However net profit fell 3.8 per cent to Rmb17.34bn as property prices outside of top-tier Chinese cities tumbled. Gross profit margin fell 0.4 percentage points to 28.1 per cent in 2015, and profit margin at Evergrande’s core businesses – excluding gains from revaluation of investment properties and exchange losses – was 8.3 per cent, down 2.6 percentage points from 2014.
Evergrande, already well-known for debt-fuelled expansion, saw its debt to equity ratio rise to 93.5 per cent as of the end of December, up from 85.9 per cent in 2014.
That translated to a 16.5 per cent fall in basic earnings per share last year to Rmb0.71 – not that anyone seems to be worrying. Hong Kong-listed shares in the company are up 14.8 per cent over the past year and have easily outperformed the benchmark Hang Seng Index over the same period.