Greentown China (3900) H1 2024 earnings summary

Executive summary

• Revenue reached RMB69.56 billion in 1H2024, up 22.1% year-over-year, hitting a record high for the period, with property sales as the main driver.

• Core profit (non-GAAP) rose 27.5% to RMB4.95 billion, while reported profit attributable to owners fell 19.6% to RMB2.05 billion due to lower gross margins and higher impairment losses.

• Contracted sales totaled RMB126.5 billion, ranking third in the industry, with self-investment projects contributing RMB85.4 billion and a high cash collection rate of 103%.

• The company maintained a robust cash position, with bank balances and cash at RMB75.13 billion as of June 30, 2024.

• No interim dividend was declared for the period.

Financial highlights

• Gross profit was RMB9.10 billion, down 8.2% year-over-year; gross margin declined to 13.1% from 17.4%.

• Property sales revenue was RMB63.76 billion, up 22.0% year-over-year; average selling price increased 4.5% to RMB24,100/sqm.

• Administrative expenses decreased 7.3% to RMB1.69 billion, while selling expenses rose 33.4% to RMB1.13 billion.

• Finance costs dropped to RMB1.30 billion, with weighted average interest cost reduced to 4.0%.

• Net gearing ratio rose to 67.2% from 63.8% at year-end 2023.

Outlook and guidance

• The company expects continued industry challenges in 2H2024 but sees opportunities as policy support increases and market stabilizes.

• Focus areas include refined destocking, prudent capital management, selective investment, product innovation, and management optimization.

• Sufficient saleable resources for 2H2024, with RMB169.0 billion in saleable value and 6.88 million sqm in self-investment projects.