CR Land's sales momentum forecast to resume in October

The September contracted sales drop was within analysts’ expectations.

Kim Eng Hong Kong Research noted:

CR Land announced its September contracted sales yesterday after market closed.

The value of CNY3.81b represents a 36.1% MoM drop from August’s CNY5.96b. For 1-9M12A, contracted sales rose 56.4% YoY to CNY37.68b, or 94.2% of the company’s sales target of CNY40b (or 75% of previous management guidance of CNY50b).

For rental income, the YoY growth was 11.6% for August to HKD281m while 1-8M12A value rose 32.8% YoY to HKD2.28b.

The September contracted sales drop was within our expectations due to the high base (August sales were the second highest in 2012, after June’s spectacular CNY7b achievement).

We believe that the sales momentum of the state-owned developer will resume in October and remainder of the quarter with more launches.

The rental income growth was also in line with our expectations.