HONG KONG: Sunac China Holdings Ltd plans to slow the rate of land purchases to boost profit and cut debt, a top executive said on Friday, a day after the country's sixth-largest property developer by sales reported a tripling in half-year earnings.
The developer aims to lower its net debt ratio to 90 percent by the end of 2018 and 70 percent a year later, Vice President Gao Xi said at a briefing, from over 200 percent at the end of 2017.
Core profit, which excludes revaluation gains, rose 204 percent to 1.37 billion yuan ($212.21 million) in January-June due to wider profit margins. Net profit rose 1,683 percent.
Sunac's debt is likely to surge in the second half after the firm bought 91 percent of 13 tourism projects in July from conglomerate Dalian Wanda Group Co Ltd for $6.5 billion. It said the projects will be "earnings positive" through 2019.
Chairman Sun Hongbin also said Sunac plans to invest in at least seven more Wanda tourism projects, but the stakes will be lower than 91 percent.
The Tianjin-based developer also bought large amounts of land through acquisitions of smaller firms in the first half, and invested $2.2 billion in cash-strapped tech firm LeEco.
Sunac has tapped multiple financing channels offshore in recent weeks, including selling U.S. dollar-denominated bonds and conducting a private share placement, after a string of high-profile deals brought it increased government scrutiny. - Reuters
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