COLI Contracted Sales Surge 73% in Q1

China Overseas Land and Investment, the country’s third-largest developer by contracted sales in 2022, got off to a flying start in 2023 as first-quarter contracted sales jumped 73.2 percent year-on-year to RMB 83.6 billion ($12 billion).

Sales of domestic commodity housing throughout China rebounded in the first three months of the year, state-backed COLI said Wednesday in a filing with the Hong Kong stock exchange, with significant growth in transactions of residential properties in key first- and second-tier cities.

COLI’s first-quarter revenue totalled RMB 31.9 billion, up 10.6 percent year-on-year, as operating profit leapt 34.3 percent to RMB 6.64 billion (excluding gains arising from the acquisition of equity interest in the same period last year).

“The group leverages its advantages in financial stability, abundant capital, rich saleable resources, and a premium property portfolio,” chairman Yan Jianguo said in the filing.

Momentum Carries On

COLI achieved RMB 276.1 billion in contracted sales last year, down 20.4 percent but still good for third place in China behind Country Garden Holdings (RMB 356.9 billion) and Poly Developments and Holdings (RMB 306.8 billion).

In this year’s first quarter, COLI acquired two land parcels in two cities in mainland China, adding 190,000 square metres (over 2 million square feet) of gross floor area to its land reserve. The total land premium was RMB 4.22 billion, the company said.

COLI made note of its sound financial position, with bank balances and cash amounting to RMB 139.66 billion and net gearing at an industry-low level below 40 percent.

“On the foundation of its stability, the group will maintain progressiveness and seize the opportunity of market stabilisation and recovery to boost sales growth, while maintaining targeted and lean investment, precise management, and strengthening competitiveness, as well as proactively accumulating resources for sustainable and high-quality development in the future,” Yan said.

Property Crisis Mop-Up

With the Chinese government enlisting state-owned developers to help absorb assets from distressed builders, COLI has had a hand in the clean-up effort.

The company early last year acquired two under-construction residential projects in Xuzhou, in northwest Jiangsu province, and a third mixed-use project in Yiwu, in central Zhejiang province, from its existing partner in the developments, cash-strapped Agile Group, for a total consideration of RMB 1 billion.

COLI also featured in the intense bidding that marked Shanghai’s first land auction of 2023, with the group vying for a plot in the city’s northwestern Putuo district. The parcel was ultimately won by a consortium of state-owned Zhejiang Communication Investment Group and the property arm of state-owned Xiamen Xiangyu Group for RMB 3.8 billion, the South China Morning Post reported.

In March, COLI reported a 2022 profit of RMB 23.26 billion, down 42 percent, on revenue of RMB 180.32 billion, down 25.6 percent.