Mingfa profit soars 10 times to CNY1.3bn

The mall developer maintains application of prudent strategy to expand the countrywide land bank.

Mingfa Group (International) Company Limited (“Mingfa”), a leading developer and operator of mega malls in China, announced its unaudited interim results for the six months ended 30 June 2011.

The Group achieved encouraging results with robust growth in both revenue and gross profit during the period under review. In the first half of 2011, the revenue and profit attributable to shareholders was recorded as RMB 1,587.5 million and RMB 1,340.9 million respectively, representing an increase of over 1.65 times and 10.14 times compared to the corresponding period last year. The jump was mainly due to the increase in delivery of properties upon completion. The gross profit surged 4.31 fold to RMB 797.6 million, mainly attributable to the increase in the area of property sold and delivered upon completion at a higher average sales price (“ASP”). The ASP per square meter in respect of the sales recognized for the six months ended 30 June 2011 increased to RMB 8,412.7 from RMB 6,612.8 in the same period in 2010. The primary reason for the increase was due to the change of property mix.

The basic earnings per share soared 10.15 times to RMB 22.3 cents. The Board of directors has made every effort to maintain a stable dividend distribution policy, while prudently keeping a sound financial position for further development. In view of the Group’s development needs, the Board does not recommend a payment of interim dividend for the six months ended 30 June 2011.

In the future, the Group will focus on the property market along the Greater Yangtze River Delta, and those rapidly developing regions in the PRC such as Taizhou, Tianjin, Shenyang, Changsha and Panjin. The Group will also proactively seize opportunities to discuss and enter into memoranda of understanding with the relevant governmental authorities in relation to various development of land designated for sizable commercial and residential complex in different cities and locations. The Group aims to take these opportunities to establish a closer strategic and working relationship with the relevant governmental authorities which are in the interest and to the benefit of the Group in the long run.

Geographical diversification will ultimately further enhance the quality of the Group’s land bank. The Group will closely monitor and adjust its investment and development strategies from time to time in response to the market pace and condition. We will not only proactively solidify our leading market position in the Guangdong Province, but also acquired substantial amount of quality lands and prudently penetrate into markets with potential growth in other provinces, according to a Mingfa report.

Mr Wong Wun Ming, concluded, “Facing the uncertainties in environment changes and the unfavorable impact of the controlling measures, the Group will keep on having countrywide expansion by applying prudent investment and development strategies. Notwithstanding the unfavorable impact of the austerity measures especially for the ‘Purchase Restriction’ Policies that will lead to volatility in China’s residential property market in 2011, in the long run, the Group believes the housing demand in China will remain strong. Such policies introduced by the central government will not only speed up the consolidation of the industry, strengthen the market mechanism that weeds out the weak companies and keeps the strong ones, but will also enhance the healthy development of the whole industry and create a better business environment for competent developers. Looking ahead, the Group is committed and confidant to achieve continued business growth and outstanding financial performances in the challenging year of 2011.’’