BEIJING (XFN-ASIA) - Gemdale Corp (SHA 600383) said first half net profit rose 17.13 pct year-on-year to 240.83 mln yuan due to to rising property sales in Beijing, where the market appeared to be less affected by China's policy tightening.
In its interim report filed with the Shanghai Stock Exchange, the Shenzhen-based developer said it sold 476,000 square meters of property in the first half, down 11.97 pct year-on-year, but the value of the sales rose 5.29 pct from a year earlier to 4.972 bln yuan.
'This round of industry adjustment was characterized by continuously shrinking turnover rather than a sharp decline in prices, and the adjustment cycle is expected to last for a long time,' the company said.
Gemdale, which specializes in residential sales, currently has projects in Beijing, Shanghai, Wuhan, Xi'an, as well as in Guangdong province.
In the first half, operating revenue increased 21.7 pct from a year earlier to 2.27 bln yuan.
Operating revenue from Beijing rose 170.08 pct year-on-year to 956.41 mln yuan, accounting for over 40 pct of total revenue. Revenue from Guangdong province was up 47.29 pct at 467.42 mln yuan.
Revenue from Shanghai decreased 79.71 pct year-on-year to 143.78 mln yuan, the company said.
Selling expenses and management expenses rose 106 pct and 33 pct respectively to 167.67 mln yuan and 142.05 mln yuan in the first half.
Cash flow from operating activities was minus 1.474 bln yuan, widening from minus 1.285 bln yuan a year earlier.
Earnings per share came in at 0.14 yuan, down slightly from 0.15 yuan a year ago.
Although the revenue performance was slightly lower than expected, it still outperformed the overall market, the company said.
Looking ahead, Gemdale said the economic growth rate is expected to decline with inflation staying at a relatively high levels.
Gemdale does not expect tight monetary conditions to change in the short term, and assumes that rate hikes are still possible.
The company said it is working with Roland Berger Strategy Consultants to improve its competitiveness and reduce market risks.
It will also seek to diversify financing channels for both day to day operations and for possible acquisitions.
Yesterday, the securities regulator rejected the company's new-share issue plan. Gemdale tumbled 5.03 pct to 8.87 yuan after the news.
The company did not make an earnings forecast for the rest of 2008.
(1 usd = 6.8 yuan)
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