Country Garden's contract sales plummet 30% in February

But recent project launches may trigger its comeback.

According to Maybank Kim Eng, Country Garden achieved a high CNY5.1b of contract sales in Feb, down only 30% MoM off a very high base in Jan and exceeding its expectation of CNY4b of sales – partly due to launches and early opening of sales offices for many projects.

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In Feb, Country Garden launched two projects, including Hangzhou Xisha project, its 1st in Hangzhou) in early Feb and achieved an ASP of CNY10k/sq m for apartments which was lower than our expected ASP but saw good sell-through. 

There is a Poly project in the district with apartments priced at around CNY11-12k/sq m and Hangzhou Country Garden’s apartments are planned for mid-2014 delivery.

There are also around 28 semi-attached/low-rise townhouses which could be pre-reserved but have not yet been officially launched but the local sales expect high ASPs of close to CNY45-50k/sq m.

The other project that was launched was Chongqing Dianjiang Project (垫 江) which Country Garden acquired in 2012 with AV of below CNY1k/sq m and was recently launched at an ASP of CNY6k/sq m.

For old projects, Country Garden also launched some new batches, such as the commercial portion of Huangshan Country Garden which Soufun indicated it fetched an ASP of CNY7k/sq m for 140-300 sq m units located on the first two floors.

Recent launch of Golden Beach project in Lingao, Hainan last weekend saw a sell-through ratio of over 50% at a higher than expected blended ASP of CNY8k/sq m, which is good considering policy noises. 

A more even sales split between 1H:2H for 2013 is planned for this year, unlike in 2012 when it was 2H-heavy.