Business Maverick: China’s biggest builder warns core profit could plunge 70%

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Country Garden Holdings has warned that first-half earnings probably tumbled by as much as 70% amid an escalating property crisis in the country.

The Foshan-based company said preliminary core profit could reach 4.5 billion yuan to 5 billion yuan for the first six months of the year, down from 15.2-billion yuan a year earlier, according to a filing on Thursday.

Country Garden “will not be the only one”, said Shujin Chen, analyst at Jefferies Financial Group. Chen expects more private developers to report 25% profit declines in the first half given weak sales. Country Garden said net income in the first half reached about 200 million yuan to 1 billion yuan, down from 15 billion yuan a year earlier. The company expects to report full results in the second half of August.

 

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