Vanke profits grow despite revenue slowdown

China Vanke Co Ltd posted double-digit profit growth despite a moderate decrease in revenue during the first quarter amid the COVID-19 outbreak.

The Shenzhen and Hong Kong dual-listed real estate giant, which is positioning itself as a city and town developer and service provider, said revenue fell 1.2 percent between January and March from same period a year earlier to 47.77 billion yuan (US$6.73 billion). Net profit attributable to equity shareholders, however, amounted to 1.25 billion yuan, a year-on-year increase of 11.5 percent, according to a filing to the Shenzhen Stock Exchange late Monday.

Operating revenue from property development and related business, which accounted for almost 96 percent of the company's revenue last year, dropped 6.4 percent year over year to 39.36 billion yuan during the latest three-month period.

In terms of Vanke's property development business, contracted sales totaled 8.848 million square meters and 137.88 billion yuan by value during the first quarter, marking year-over-year declines of 4.3 percent and 7.7 percent, respectively.

By area, the Shanghai region, which consists of 15 cities including those in neighboring Zhejiang, Jiangsu, Anhui and Jiangxi provinces, accounted for one-third of the company's total sales area and 45.9 percent of value.

During the first three months, Vanke acquired 11 new projects into its development pipeline with a planned gross floor area of 2.39 million square meters, among which 1.876 million square meters are attributable to the company's equity holding, according to the quarterly report.

The coronavirus outbreak also slowed Vanke's pace in commencement. A total of 7.08 million square meters of space kicked off construction during the three-month period, a year-over-year drop of 30.5 percent. That represents 24.3 percent of the company's annual target, compared with 28.2 percent registered in the first quarter of 2019.