Beijing North Star Company (588) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 was RMB3,429.87 million, down 52.81% year-over-year, mainly due to a sharp decline in real estate development income.

• Operating loss reached RMB355.70 million, compared to an operating profit of RMB755.28 million in the prior year period.

• Loss attributable to ordinary shareholders was RMB769.58 million, a significant reversal from a profit of RMB132.97 million last year.

• Core operating loss (excluding fair value changes) was RMB586.43 million; fair value losses on investment properties after tax were RMB183.15 million.

• Convention and exhibition (including hotels) and commercial properties segment achieved stable growth, while real estate development faced significant challenges.

Financial highlights

• Gross profit for the period was RMB487.88 million, down from RMB1,291.12 million year-over-year.

• Losses per share were RMB0.2286, compared to earnings per share of RMB0.0395 in the same period last year.

• Finance expenses remained high at RMB423.3 million; net finance expenses were RMB351.0 million.

• No interim dividend was declared for the period.

• Net cash used in operating activities was RMB456.58 million, compared to net cash generated of RMB868.84 million last year.

Outlook and guidance

• The company plans to focus on integrating real estate and commercial management, with a strategic emphasis on convention and exhibition business.

• In the second half of 2024, targeted sales area is 639,200 sqm with a contracted amount of RMB8.51 billion.

• Estimated fixed asset investment for H2 2024 is RMB123 million, funded internally.

• The company plans to resume construction on 1.75 million sqm and complete 586,500 sqm in H2 2024.