© Thomson Reuters Real estate developer China Country Garden logo at a news conference in Hong KongAuthor: Claire C
HONG KONG (Reuters) - Leading property developer China Country Garden Holdings said it would shrink its presence in small cities and ditch side businesses beyond building contracts and building robots to become a high-tech firm.
On Thursday, the company reported a 90% drop in core revenue and a record net loss in 2022 due to a slowdown in the housing market and the sector's debt crisis.
Country Garden said its basic profit, which excludes changes in the value of financial assets, instruments and currency, was 2.6 billion yuan ($377.4 million), up from 26.9 billion yuan a year earlier.
The company reported a net loss of 6.1 billion yuan, compared with a net profit of 26.8 billion yuan in 2021.
Earlier this month, Country Garden reported weak results, posting a lower gross profit, allowance for impairment for real estate projects and a net loss on foreign exchange.
Chinese real estate firms have been struggling to complete projects and sell new homes since mid-2021 in a sector hit by the debt crisis.
So far, many Chinese developers have experienced a decline or loss of core revenue in 2022, while some state-backed developers have fared better and seen growth.
Chairman Yang Huiyang, speaking at his first earnings call earlier this month since his father Jung Kwok-kyung's retirement, said the company aims to increase land balances in Tier 1 and Tier 2 cities to 50% from the current 40%. The market is falling. the outside part
It will also focus on the business of building relationships to create projects for other companies, which is an easy and highly profitable asset, in addition to the business of building robots to increase efficiency and reduce costs.
Home sales in low-end cities have been flat for the last two years amid a general slowdown in the housing market, and Country Garden expects sales to weaken this year.
In June, the developer set up a technical team, and by the end of January, 33 types of robots had been commercialized and put into operation.
According to company president Mo Bing, all other new businesses that were established previously would either be closed or suspended.
Country Garden shares soared after the results were released, up 5.1%. The Hang Seng Peninsula real estate index rose 2.6%.
The company's total interest-bearing debt fell 15% to 271.3 billion yuan, while its net leverage ratio stood at 40%, down 5.4 percentage points from the end of 2021.
($1 = 6.8900 CNY)
(Reporting by Claire Gem; Editing by Jamie Freed and Mark Potter)
