Powerlong Real Estate (1238) H1 2025 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2025 was RMB13,251 million, down 15.3% year-over-year, mainly due to lower property sales revenue.

• Loss attributable to owners was RMB2,652 million, with basic loss per share at RMB64.1 cents, compared to a loss of RMB2,623 million in the prior year period.

• Gross profit increased 0.4% to RMB2,025 million, with gross margin rising to 15.3% from 12.9% year-over-year.

• The auditor issued a disclaimer of conclusion due to material uncertainties about going concern, citing significant defaults and a pending liquidation application against a key subsidiary.

• Contracted sales fell to RMB3,723 million with a contracted sales area of 316,718 sq.m., both significantly lower than the prior year.

Financial highlights

• Revenue from property sales fell 17.9% to RMB10,693 million; rental and management income decreased 1.4% to RMB2,144 million.

• Cost of sales dropped 17.7% to RMB11,226 million, reflecting lower GFA delivered.

• Fair value losses on investment properties surged to RMB1,721 million from RMB729 million year-over-year.

• Core losses (excluding non-recurring items) attributable to owners were RMB1,760 million, improved from RMB1,937 million in the prior year; core losses (excluding fair value and FX changes) were RMB1,632 million.

• Net gearing ratio increased to 104.1% from 101.6% at year-end 2024.

• Cash and cash equivalents plus restricted cash totaled RMB7,327 million as of 30 June 2025, down 2.8% from year-end 2024.

• Total borrowings stood at RMB56,111 million, with RMB27,597 million due within one year.

Outlook and guidance

• The group expects continued market volatility but plans to focus on stabilizing operations, revitalizing projects, and prudent land bank expansion, especially in the Yangtze River Delta.

• Liquidity management, cost control, and debt restructuring or asset sales are key priorities for the remainder of 2025.