SHANGHAI, March 12, SinoCast -- Chinese leading commercial estate builder SOHO China (0410.HK) reported net profits of CNY 1.97 billion in January through December 2007, a sharp surge of 477% compared with that for the whole year of 2006.
Based in Beijing, the developer is believed to benefit from housing price increases in local market last year. The growth rate of house prices in Beijing averaged 11.4% in 2007.
As showed in SOHO China s annual report, the company had five large-scale commercial properties under construction last year with total operating revenues up 300% to hit CNY 6.95 billion.
The Hong Kong-listed land company attributed the turnover growth to an increase in the selling prices of buildings.
Its settled areas nearly tripled that in 2006 to reach 282,000 square meters while the settlement price rose from CNY 20,400 per square meter up to CNY 24,400 per square meter, which represented a 20% growth.
In 2007, the estate giant completed new areas of about 337,000 square meters, with 111,800 sold at a price of CNY 35,000 per square meter, thus getting sales revenues of CNY 403,200 in all.
Notably, the house prices of SOHO China have surpassed the average growth rate in Beijing s commercial estate market.
Statistics from the Beijing Municipal Bureau of Statistics show that Price Index of Real Estate Sales leaped 11.4% in Beijing in 2007, with such index for residential buildings jumping 12.8% year on year.
Focusing heavily on upscale commercial estate projects in the central business districts (CBD) of Beijing, SOHO China has achieved higher-than-expected returns on investments. Last year, gross profit margin of it was 55%, versus 53% in 2006.
As for this year, the company expects to catch the business opportunities during the coming Olympic Games in Beijing. Early reports said that the land price in the surrounding areas of Beijing Olympic stadiums has risen up to CNY 50,000 per square meter.
When asked of the real estate sector in Beijing after the Olympics, chairman of SOHO China said it is hard to say, but still shows confidence.
Last year, there were 520,000 new populations in Beijing, while houses sold in city were merely 144,000 suites.
SOHO China got listed on the Stock Exchange of Hong Kong on October 8, 2007. It sold 1.55 billion H-shares at HKD 8.3 a share, the higher end of the indicative price range, thus raising HKD 12.86 billion proceeds.
(USD 1 = CNY 7.10)
