Greentown China (3900) H2 2024 earnings summary

Executive summary

• Revenue rose 20.7% year-over-year to RMB158.5 billion, driven by strong property sales and improved average selling prices.

• Net profit attributable to owners fell 48.8% to RMB1.60 billion due to higher impairment and fair value losses, despite underlying operational improvements.

• Gross profit increased 18.5% to RMB20.2 billion, with a gross margin of 12.8%.

• The company maintained a high cash-to-short-term debt ratio of 2.3x and reduced its net gearing ratio to 56.6%.

• Total contracted sales reached RMB276.8 billion, ranking 3rd in the industry, with a cash collection rate of 104%.

Financial highlights

• Revenue from property sales was RMB147.0 billion, up 21.9% year-over-year; average selling price increased 19% to RMB23,145/sqm.

• Gross profit margin for property sales improved to 11.7%.

• Other income rose 2.7% to RMB2.93 billion, mainly from higher interest income.

• Administrative expenses decreased 13.6% to RMB4.44 billion, reflecting cost optimization.

• Selling expenses increased 21.8% to RMB3.32 billion, driven by higher sales commissions and marketing.

• Finance costs fell to RMB2.58 billion, with weighted average interest cost down 40 bps to 3.9%.

• Impairment losses on non-financial assets surged to RMB4.04 billion, reflecting market downturn impacts.

• Final dividend proposed at RMB0.30 per share (2023: RMB0.43).

Outlook and guidance

• 2025 is expected to see continued policy support and a potential rebound in first- and second-tier cities, but overall market recovery remains uncertain.

• Saleable value of self-investment projects for 2025 is estimated at RMB200.2 billion, with 83% in high-tier cities.

• Focus areas include destocking, cash security, precise investment, product upgrades, cost control, innovation, and project management business expansion.