China-based developer Yanlord Land Group has reported higher revenue for 1HFY20. However, because it was selling a less profitable mix of projects, earnings for the same period dropped instead.

For the six months to June 30, Yanlord recorded revenue of RMB9.2 billion ($1.82 bil), up 18.2% y-o-y. However, its gross profit margin was just 35.9%, versus 46.5% in 1H2019 as it sold a larger proportion of projects that fetched a lower margin.

As a result, its earnings for the same period was RMB492.9 million, down 59% y-o-y from RMB1.19 billion.

“The weaker global economy due to the COVID19 pandemic, coupled with the implementation of introduced austerity measures will continue to present near term challenges to the PRC real estate sector,” said Zhong Sheng Jian, Yanlord’s chairman and CEO.

The company is seeing a steady earnings pipeline. During 1HFY20, it booked presales of some RMB29.8 billion, up 65% y-o-y. Average selling price for the units pre-sold was RMB35,80 per square metre, up 26.2% y-o-y.

As of June 30 2020, Yanlord, together with its joint venture partners and associates held a total landbank of some 10 million sqm in 17 cities in China. Zhong said the company will be “prudent” in acquiring more land.

On Aug 4, Yanlord signed an investment agreement with Singapore’s sovereign wealth fund GIC to co-invest up to RMB7 billion in residential projects in China.

“Moving forward, we will continue to penetrate our presences in core high growth cities, and when opportunities arose, we will expand into new cities and new economic regions,” said Zhong.

As at June 30, Yanlord’s net asset value per share was RMB14.56 ($2.88)  down slightly from RMB14.62 as at Dec 31 2019.

Yanlord shares closed Aug 12 at $1.27, unchanged for the day.