Listed real estate firms show varied half-year results

Only five of thirteen major developers have exceeded 45% of full-year revenue target after 6 months

China's listed real estate companies have been releasing their half-year earnings reports since last week and the sales results show a huge gap between the leading companies and the rest.

At least 13 property developers have disclosed their half-year sales results. Among them, only five of them have achieved 45 percent or more of their whole-year sales target in the first six months of 2014, according to various reports on Monday and Tuesday.

Guangzhou-based Evergrande Real Estate Group made 69.3 billion yuan ($11.09 billion) in sales revenue in the first half of this year, with 55.4 percent year-on-year growth, according to its half-year sales report released on its website Monday.

Evergrande fulfilled 63 percent of its whole-year sales target, taking the lead among the 13 real estate companies in terms of sales goal fulfillment.

Shenzhen-based China Vanke Co Ltd made 100.9 billion yuan in sales revenue in the same period, which is equal to half of its 200 billion yuan sales target set for 2014, according to its earnings report filed on Shenzhen Stock Exchange on Friday.

Shanghai-listed Poly Real Estate Group Co's sales revenue reached 65.1 billion yuan, with 2.35 percent year-on-year growth, according to its sales result released Tuesday.

Poly has achieved about 43 percent of its 2014 sales goal and the company will be able to finish its sales goal this year because as a central government-owned enterprise, it does not have much pressure on financing, according to Shanghai-based Oriental Morning Post newspaper's Tuesday report.

Meanwhile, several other real estate companies, such as Top Spring International Holdings and Glorious Property, only earned around 30 percent or even 20 percent of their whole-year sales revenue target, Nandu Daily newspaper reported Tuesday.

Statistics collected by China Index Academy shows that among the 19 property developers that earned revenue of more than 30 billion yuan in 2013, only 9 of them saw year-on-year sales growth in the first half of 2014.

In a sluggish market, industry leaders enjoy obvious advantages such as brand value and a strong reputation among home buyers, which lead to easier financing, Liu Yuan, senior research director at Centaline Group in Shanghai, told the Global Times Tuesday, noting the revenue disparity is not unexpected.

Hui Jianqiang, research director with real estate information provider Beijing Zhongfangyanxie Technology Service, told the Global Times Tuesday that the property industry may face adjustment and reorganization, resulting in market share being concentrated among the leading players.

In the next two or three years, some small companies may be squeezed out of the market by being acquired by large companies, he predicted.

Property developers should focus on their priority regions and avoid blind expansion, according to Hui.

Liu said currently the most important task for property developers is to maintain a stable amount of capital, which requires them to increase profit rates.

But it is almost impossible to get higher profit rates by raising home prices, Liu said, noting the real estate firms may resort to cost reduction.

Both Liu and Hui said that it will not be easy for most real estate companies to fulfill their whole-year sales target in 2014.

Therefore, the two experts believe that in the second half of 2014, the Chinese real estate market will see more home price reductions to encourage purchases.

Faced by potential market downturns, some local governments have also taken steps to encourage more home purchases.

For example, Hohhot, the capital city of North China's Inner Mongolia Autonomous Region, which recently lifted a restriction on housing purchases.