(Yicai Global) Aug. 30 -- China Vanke’s shares slumped after the real estate giant reported an 11.7 percent decline in first-half profit from a year earlier on narrowing project margins amid regulatory curbs aimed at damping down the property market.

Vanke’s stock [SHE:000002] closed 7 percent lower in Shenzhen today at CNY19.43 (USD3), giving it a market capitalization of CNY221.5 billion (USD34.2 billion), while its Hong Kong-traded shares [HKG:2202] fell by about the same to HKD19.43 (USD2.50).

Net profit was CNY11.1 billion (USD1.7 billion) in the six months ended June 30, the Shenzhen-based company said in an earnings report released late yesterday. Revenue rose 14.2 percent to CNY167.1 billion (USD25.8 billion).

At a press briefing today, Vanke President Zhu Jiusheng blamed limited sales growth, a rapid squeeze on profit margins on booked development projects, and the impact of the firm’s business transition for the firm’s weaker performance.

Vanke said it had contracted sales of 21.9 million square meters in the first half, up 5.5 percent from last year, worth CNY345.4 billion (USD53.4 billion), a 10.6 percent gain on the first six months of 2020. Both percentages are lower than the national average.

The sales area and amount of commercial housing nationwide jumped 27.7 percent and 38.9 percent, respectively, in the period, according to data from the National Bureau of Statistics.

Vanke did not publish an earnings forecast for the current period.

When asked today about market rumors of Vanke buying assets in debt-ridden developer China Evergrande Group, Zhu told reporters that Vanke has been in talks with Evergrande in recent months, but did not reach a substantive cooperation deal with it.

Editor: Futura Costaglione