Chinese real estate developer Kaisa Group Holdings reported strong 1H earnings on Wednesday. Revenues rose by 34.8% to RMB 30.07bn ($4.64bn), gross profit was up 23.1% to RMB 9.28bn ($1.43bn) and net profit for the six months ended June 30 was up 30.5% to RMB 3.08bn ($475mn). The group, together with its joint ventures and associate companies also reported a solid increase in contracted sales, up 77.2% to RMB 63.85bn ($9.85bn). On the balance sheet front, total borrowings were largely flat at RMB 123.78bn ($19.1bn) vs. RMB 121.47bn ($18.74bn) as at the end of December 2020. Cash on its balance sheet stood at RMB 38.36bn ($5.92bn), up from RMB 36.08bn ($5.57bn) six months prior. Kaisa managed to trim its net gearing ratio (net debt to equity) to 93.7% with a cash to short-term debt ratio of 1.53. Kaisa’s Board recommended a dividend of HKD 4 cents per share, subject to shareholder approval.

The earnings have been well received by bond investors with its 11.65% bonds due 2026 up 2.8% to 91.25, yielding 14.23% on the secondary market. The bonds have been on an upward trend since the start of August, when they were trading at ~77 levels.

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