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KWG Property reaches 82% of sales target

HONG KONG: China developer KWG Property Holding has already achieved 82% of its 10 billion yuan (RM4.59 billion) annual sales target despite the central government's measures to cool the market.

Chief financial officer and executive director Kenneth Leung said the company had contract sales of 8.2 billion yuan by the end of last month.

This was achieved through an  average selling price of 11,575 yuan per square metre, about 31% higher than the 8,848 yuan per square metre in the first half of last year, and higher than the company's earlier expectations of 10,000 yuan per square metre, Leung said.

His remarks came after KWG  reported interim net profit had risen 141% to 407.3 million yuan on turnover 2.34 billion yuan, which was 160% higher than in the year-ago period. No interim dividend was declared.

Chairman Kong Jianmin said the developer's unique designs enabled it to price the homes at a premium despite the government's austerity measures.

"Our sales did not slow down and we will launch more middle to high-end projects in the next few months," Kong said.

Roger Law, a vice-president of KWG's finance resources division, said revenue from the pre-sale of 550,000 square metres would be booked in the second half of this year.

While KWG has a cash reserve of 5.8 billion yuan, it owes land premiums of 2.27 billion yuan, of which 1.41 billion yuan is due in the next quarter.

The company has a land bank of 8.12 million square metres at an average cost of 2,100 yuan per square metre which could support "five to six years of development", Law said.

Meanwhile, another China developer, Chongqing-based CC Land Holdings, recorded an interim net profit of HK$73 million (RM29.35 million), against a HK$111 million net loss last year. The recovery was due to strong sales and the disposal of a subsidiary.

Revenue rose to HK$679 million from HK$373 million.

The firm generated HK$410 million from property sales, 155% more than the HK$161 million a year earlier. Sales volume jumped 201% to 81,330 square metres. — South China Morning Post
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