Sales in Guangzhou and Beijing contributed 55 per cent of revenue last year. The rebound in the market in the leading cities saw R&F’s average selling price rise 16 per cent to 11,590 yuan per square metre last year.

But the company’s gross margin eased to 34 per cent from 37 per cent in 2014 due to higher land costs.

“Land is too expensive in first-tier cities, we won’t buy overpriced land; there are also opportunities in some second-tier cities,” chairman Li Sze-lim told a press conference on Friday.

Li said he would invest more in provincial capitals as Nanjing in Jiangsu and Zhengzhou in Henan this year.

The company already has about 42 per cent of its land bank in second-tier cities, with 30 per cent in first-tier cities.

Alan Jin, a property analyst at Mizuho Securities, is positive about the company’s outlook.

The company would benefit from the recent strong turnaround of the housing markets in some second-tier cities in which it had extensive exposure, including Tianjin, Huizhou and Taiyuan, he said.

Jin added that as R&F had no exposure in Shenzhen and limited exposure in Shanghai, two overheated markets, “potential policy risks for its projects are low”.

Nevertheless, the company’s net gearing at the end of last year was 124 per cent, and analysts estimate it could be expanded to 170 per cent if perpetual bonds were treated as debt.

Li said he expected the debt ratio would remain unchanged this year but costs could be saved by tapping cheaper onshore bonds instead of offshore bonds.

“We plan to save at least 1 percentage point on interest rates this year,” Li said.

The company also incurred an exchange loss of 1.21 billion yuan last year due to depreciation of the yuan and Malaysian ringgit against the US dollar.

Li said it was hard to predict currency changes but he believed the yuan would stabilise in the near term.

In terms of the currency impact on its foreign investment, Li said the company would be “more careful” in overseas bidding.

The company has one project in Malaysia and two projects in Australia under development.

Li said R&F would still focus on the mainland housing market and would not shift to other businesses.

“We have seen our sales have a strong pick up in March and last month. With the slowdown of other sectors, for sure the Chinese government will continue to support the real estate industry and issue more beneficial policies,” he said.

The Guangdong-based developer achieved contracted sales of 54.5 billion yuan last year and is targeting sales of 60 billion yuan this year.

The company proposed a final dividend of 0.9 yuan per share.