Evergrande shares jump 15% as 1H profit set to triple

SHANGHAI • Shares of China Evergrande Group, China’s largest developer, surged as much as 15% after the company said half-year profit may triple from a year earlier, driven by soaring property prices and rising sales of homes.

The stock was up 13% at HK$20 (RM11) in Hong Kong as of 9:40am yesterday, the biggest gain since May. In the year to date, the company’s market value has more than quadrupled.

The developer also said its full repayment of perpetual securities will help boost profit attributable to shareholders, according to a Tuesday regulatory filing. Evergrande’s core profit had declined in the year-earlier period, driven by higher costs to market its properties and service its debt.

Controlled by billionaire Hui Ka Yan, Evergrande’s strategy of focusing on thirdand fourth-tier cities paid off as China stepped up home-buying curbs in top cities to rein in property prices. Morgan Stanley analysts led by John Lam estimated that one gauge of Evergrande’s core profit was likely to show a ninefold jump to 9.9 billion yuan (RM6.24 billion) in the first-half (1H) from 1.1 billion yuan a year earlier.

Evergrande’s moves to cut its debt load spurred a rally in bonds and shares last month. — Bloomberg