Powerlong Real Estate (1238) H1 2024 earnings summary

Executive summary

• Revenue rose 27.3% year-over-year to RMB15,651 million, mainly from increased property sales and higher delivery volumes.

• Gross profit dropped 43.2% to RMB2,017 million, with gross margin falling to 12.9% from 28.8% due to higher impairment provisions.

• Loss attributable to owners was RMB2,623 million, a reversal from a RMB94 million profit in the prior year.

• Core losses (excluding non-recurring items) reached RMB1,937 million, compared to core earnings of RMB1,280 million last year.

• No interim dividend was declared for the period.

Financial highlights

• Revenue from property sales increased 32.6% to RMB13,027 million.

• Rental and property management income grew 7.2% to RMB2,175 million.

• Cost of sales surged 55.8% to RMB13,634 million, driven by higher GFA delivered and impairment provisions.

• Fair value losses on investment properties increased to RMB729 million from RMB465 million year-over-year.

• Basic loss per share was RMB63.3 cents, compared to earnings per share of RMB2.3 cents last year.

Outlook and guidance

• The sector is expected to focus on stabilizing the market and destocking in H2 2024, with more demand-side easing policies anticipated.

• The group will prioritize prudent land bank expansion, cost control, and refined management to ensure stable operations and timely delivery.

• Liquidity management, debt restructuring, and asset revitalization or sales remain key priorities.