Shares with exposure to China´s property market rallied today on positive financial results.
Chinese property developer Evergrande posted a 250% rise in core profit over the first six months of the year. Strength in its property business helped Chinese conglomerate Citic report a 60% increase in first half profit.
Evergrande and Citic shares were up by around 12% and 2% respectively.
Rising sales and prices
Real estate name Evergrande saw core profit rise by 250% over the first half to RMB27.3bn, aided by both rising property sales and prices.
Sales rose more than two-fold to RMB188bn over the first six months. Evergrande also issued upbeat guidance, claiming it was on course to exceed a RMB450bn sales forecast for the year.
Hong Kong-listed Evergrande pledged to reduce debt as it readies itself for a listing on the Chinese mainland. The company said it would aim to cut net gearing from 240% to 70% after 2020.
Evergrande will also look to raise RMB30bn to RMB50bn prior to a listing on China´s A-share market, which is set for next year.
Share buybacks and the plans for a mainland listing have helped Evergrande shares surge by 390% year-to-date.
Citic, a major Chinese conglomerate, reported a 60% surge in profits for the first half of the year, to HK$32.3bn, with a HK$5.7bn contribution from its property business. The latter was boosted by the sale of two office buildings in Shanghai.
The Hong-Kong listed company also netted HK$2.7bn from the disposal of its holding in Chinese football club Guoan.