CHINA Vanke Co., the world’s largest residential property developer by revenue, said yesterday that its net profit for the first half of 2014 rose 5.6 percent, boosted by record sales and aggressive marketing amid an industry downturn.

    Shenzhen-based Vanke said that net profit for the January-June period was 4.81 billion yuan (US$783 million) against 4.56 billion yuan a year earlier.

    The firm’s revenue declined 1 percent to 40.96 billion yuan from 41.39 billion yuan a year earlier. Vanke attributed this to fewer project completions in the first half of this year, adding that it expects more finished projects in the second half.

    “Market volatility may increase in the short run,” Vanke said in a statement, adding that it aims to enhance inventory clearing and company cash flow.

    Vanke, which operates in more than 60 Chinese cities, is listed in both Shenzhen and Hong Kong. Its earnings give some indication of how larger property players are faring amid the current housing slump.

    Vanke’s “focus on smaller homes for owner occupiers is resilient in the slowing property market,” said Jeffrey Gao, a Hong Kong-based analyst at Nomura Holdings Inc. “Big companies such as Vanke are better positioned than peers amid the downturn.”

    China’s four-year efforts to rein in property prices have included home purchase restrictions and higher mortgage rates. The real estate industry, facing a surplus of empty units and slowing prices, has become a drag on the world’s second-largest economy. The central bank in May called on the nation’s biggest lenders to accelerate the granting of mortgages and urged them to give priority to first-time homebuyers.

    About 92 percent of Vanke’s projects were comprised of homes of less than 144 square meters each in the first half of the year, the company said. That helped it boost sales even as the slowdown in the country’s property market has put pressure on economic growth.

    Housing sales in China fell 10.5 percent in the first seven months of this year to 2.98 trillion yuan, according to official data, despite moves by some 30 local governments to loosen restrictions on property sales, such as limits on second homes.

    Homebuyers are staying on the sidelines on concerns that prices will continue to fall given little indication the market has bottomed out. (SD-Agencies)