Longfor Group (960) H1 2024 earnings summary

Executive summary

• Core net profit attributable to shareholders was RMB4.75 billion for H1 2024, with over 80% from investment property operation and services; investment property and services revenue rose 7.6% year-over-year to RMB13.1 billion.

• Contracted sales reached RMB51.12 billion with 3.66 million sqm sold; total revenue was RMB46.86 billion, down from RMB62.04 billion in H1 2023.

• Gross profit was RMB9.64 billion with a gross margin of 20.6%; core net profit margin was 11.7%.

• The group prioritized financial stability, reducing interest-bearing debt to RMB187.4 billion, with average finance cost at 4.16% and average borrowing period extended to 9.19 years.

• Interim dividend of RMB0.22 per share declared.

Financial highlights

• Total revenue for H1 2024 was RMB46.86 billion, down from RMB62.04 billion in H1 2023.

• Net profit attributable to shareholders was RMB5.87 billion, down from RMB8.06 billion year-over-year.

• Core basic earnings per share was RMB0.73; basic EPS was RMB0.90.

• Cash in hand was RMB50.06 billion; net debt to equity ratio at 56.7%.

• Average finance cost was 4.16%; average contract borrowing period extended to 9.19 years.

Outlook and guidance

• The group will continue to focus on high-quality development, prudent financial management, and debt reduction.

• Plans to launch about 10 new shopping malls in H2 2024 in key cities.

• Will maintain flexibility in product launches, focus on inventory reduction, and product upgrades.

• Strategy includes prudent land acquisition, focus on core cities, and maintaining high cash collection rates.