China Resources Land (1109) H1 2024 earnings summary

Executive summary

• Revenue for 1H2024 rose 8.4% YoY to RMB79.13 billion, with recurring business revenue up 9.0% YoY, accounting for 25.3% of total revenue.

• Core net profit was RMB10.74 billion, down 4.7% YoY, while recurring core net profit grew 14.4% YoY to RMB5.52 billion, contributing 51.4% of total core net profit.

• Interim dividend declared at RMB0.20 per share, up 1.0% YoY, with strong cash position and stable credit ratings.

• Contracted sales reached RMB124.7 billion, down 26.7% YoY, with unrecognized contracted sales of RMB321.45 billion providing a solid revenue base.

• The Group maintained the largest market capitalization among listed property companies in China.

Financial highlights

• Gross profit for 1H2024 was RMB17.63 billion, with a gross margin of 22.3%, among the highest in the industry but down 3.4 ppts YoY.

• Development property revenue rose 8.3% YoY to RMB59.13 billion; investment property revenue increased 7.0% YoY to RMB11.47 billion.

• Asset-light management business revenue grew 17.1% YoY to RMB7.96 billion; eco-system elementary business revenue was RMB2.64 billion.

• Cash and cash equivalents at period end were RMB118.33 billion, up 3.5% from FY23.

• Basic and diluted EPS for 1H2024 was RMB1.44; core net profit per share was RMB1.51.

Outlook and guidance

• Focus on cash flow creation, margin and ROIC improvement, cost reduction, and inventory destocking in 2H2024.

• Plans to accelerate transformation into a city operator and expand asset management as a second growth curve.

• Expects to recognize RMB166.12 billion of unrecognized contracted sales in 2H2024.

• Will continue prudent investment, optimize inventory, and enhance risk management amid ongoing industry adjustment.

• Macroeconomic outlook remains positive, with ongoing urbanization and robust housing demand.