(Yicai Global) March 24 -- The rarely heard of Chinese real estate developer Weixing Real Estate, which is backed by a button and zipper tycoon, has paid the second highest price ever for a land plot in Nanjing, eastern Jiangsu province, and revealed plans to treble its sales in five years’ time, taking market insiders by surprise.

Weixing Real Estate defeated 20 other bidders at a land auction in Nanjing, with a bid of CNY3.1 billion (USD452.8 million), equivalent to CNY43,173 (USD6,306) per square meter, according to media reports. The previous record was set in 2016 when the property market was booming.

Weixing Real Estate, which is backed by Zhang Kapeng, a businessman who made his fortune from buttons and zippers, aims to achieve annual sales of CNY50 billion (USD7.2 billion) in three years’ time and CNY90 billion in five years’ time, it said last year.

The firm has doubled its sales in the past three years, and last year logged turnover of CNY33.3 billion (USD4.8 billion). It is not impacted by the sluggish property market as it has not expanded aggressively, it said.

The cash-rich company is also able to seize the opportunity to buy land now that many developers are heavy in debt and unable to do so. Last year, the firm splashed out CNY24.3 billion (USD3.5 billion) on land. It has become very active in second-tier cities in eastern China, such as Hefei, Ningbo and Nanjing, since 2021.

Weixing Real Estate holds 30 percent market share in its home city of Wuhu, eastern Anhui province, where it has sold a floor area of over 2.5 million square meters since it was set up in 2000. It is the only real estate developer in the province with sales of over CNY10 billion in a single city.

Nationwide, it ranked 42nd last year in terms of sales, a gain of 36 places from the year before, while its land purchase value ranked 19th, also a jump of 36 places year on year, according to think tank CRIC Research Center’s 2022 ranking of the top 100 real estate developers.

Zhang owns two companies which have a combined value of CNY49 billion (USD7.1 billion). Weixing Industrial Development produces 11.6 billion buttons and 850 million meters of zippers a year, while Weixing New Building Materials makes polypropylene random copolymer pipes and has supplied huge projects such as the Hong Kong-Zhuhai-Macao Bridge and the Beijing Daxing International Airport.

The two firms have a debt-to-asset ratio is between 20 percent and 30 percent respectively and gross profit margins of between 38 percent and 40 percent, according to their financial data.

Editor: Kim Taylor