March 8, 2018 / 10:07 AM / 13 days ago

China developer Evergrande estimates up to five-fold jump in 2017 net profit

HONG KONG (Reuters) - China Evergrande Group (3333.HK) said on Thursday it estimates its 2017 net profit to be four to five times higher than the previous year, helped by the sale of more apartments and the redemption of high-interest perpetual bonds.

FILE PHOTO: A logo of China Evergrande Group is displayed at a news conference on the property developer's annual results in Hong Kong, China March 28, 2017. REUTERS/Bobby Yip

China’s No.3 developer by sales value said in a statement to the stock exchange its core profit last year, which excludes non-recurring income and revaluation gains, is estimated to roughly double.

Evergrande posted a net profit of 17.6 billion yuan ($2.78 billion) and a core profit of 20.8 billion yuan in 2016.

At least seven Chinese developers listed in Hong Kong have issued positive earnings estimates in the last two months, in a sign of how consolidation in the industry is boosting market share and income.

No.4 developer Sunac China (1918.HK) estimated earlier this week its net profit will surge over 240 percent in 2017.

Other factors contributing to the profit surge include improvement in product quality and reduction in expenses, Evergrande said in the statement.

    The company, which has the second-largest debt pile among Chinese corporates, last year redeemed all of its perpetual bonds, a debt classed as equity. These bonds, which have an average coupon of 10 percent, cost Evergrande 10.6 billion yuan in interest in 2016.

    Evergrande will release its financial results later this month.

    Reporting by Clare Jim; Editing by Muralikumar Anantharaman

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