This was mainly due to the increase in the number of property units handed over.
In 1H17, the aggregate gross floor area (GFA) sold and recognised increased by 16% to 156,774 sqm, mainly attributable to the Xuzhou Royal Palace, Shanghai Royal Palace, and Suzhou Industrial Park Royal Mansion.
Despite the increase in revenue, the group’s cost of sales – mainly comprising land acquisition costs, construction costs, capitalized borrowing costs, and indirect costs – decreased by 3% to RMB 1.08 billion 1H17.
As a result, gross profit surged by 79% in 1H17 to RMB 186.0 million, from RMB 103.7 million a year ago.
Overall gross profit margin increased by 6.2 percentage points to 14.7% in 1H17. This was mainly due to higher revenue contribution from the Suzhou Industrial Park Royal Mansion, which fetched a higher gross profit compared to projects a year ago.
Other income trebled to RMB 14.2 million in 1H17, from RMB 3.8 million a year ago, on the back of foreign exchange gain of RMB 9.8 million.
Looking ahead, the group says it has achieved a sharp increase in pre-sales for 1H17, posting record pre-sales receipts of RMB 4.71 billion for the first half of 2017. CWG notes that this is close to matching the revenue of RMB 4.78 billion for the entire year of FY16.
“These pre-sales will be progressively recognised as revenue in subsequent financial periods, and will set the foundation for good results in the next two to three years as we deliver on the projects,” says Chua Hwee Song, CWG’s chief financial officer and executive director.
“Despite the cooling measures in China, we remain convicted that the market continues to offer growth opportunities due to the underlying strong demand for properties which is expected to be sustained by higher net urbanisation and a dynamic economy,” says executive chairman and CEO Qian Jianrong.
“We are currently exploring opportunities which will hopefully mark a progressive stride in our fund management business,” Qian adds.
CWG says it remains positive about its financial performance and expects to be profitable for FY17.
The counter closed at 15 cents on Monday.
