Pan Hong Property Group, the Hong Kong-based property developer that focuses primarily on developing properties in the second and third-tier cities in China, has chalked up RMB57.3 million ($11.9 million) in net profit for the third quarter ended 31 December 2009 (3Q2010), reversing the loss of RMB3.6 million in the previous corresponding period (3Q2009).

Pan Hong says the improvement in net profit came on the back of a substantial increase in group revenue in 3Q2010 to RMB87 million, from RMB4.3 million in 3Q2009. This was driven mainly by the handover of pre-sold residential units from the group’s property development in Huzhou city, Huzhou Liyang Jingyuan Phase 2, to buyers during 3Q2010. The transfer follows the completion of construction for the residential units of Huzhou Liyang Jingyuan Phase 2 in December 2009.

Revenue recognition for property developers is dependent on the completion of construction and handover of properties that are sold. As at 31 December 2009, the group has pre-sold a total of 150 residential units at Huzhou Liyang Jingyuan Phase 2, of which 134 units were transferred to buyers during 3Q2010.

Sale of the remaining residential units of the group’s completed property development in Nanchang — Nanchang Honggu Kaixuan Phase 1 — contributed around RMB9.1 million to group revenue in 3Q2010. Around 97.4% of this development had been sold, with 29 residential units remaining at the end of December 2009.

As at 31 December 2009, Pan Hong says it had a net cash position with cash and cash equivalents totalling RMB174.9 million. Shareholders’ equity at the end of 2009 improved to RMB834.9 million from RMB684.6 million as at 31 March 2009.