Shimao Group (813) H1 2024 earnings summary

Executive summary

• Revenue for 1H 2024 was RMB29.2 billion, down 3.9% year-over-year; gross profit dropped sharply to RMB15 million from RMB3.12 billion, with gross margin at 0.1%.

• Loss attributable to shareholders widened to RMB22.67 billion from RMB12.06 billion in 1H 2023, mainly due to lower gross profit and higher other losses.

• Contracted sales reached RMB17.09 billion with 1.313 million sq.m. sold; recognized sales area fell 25.4% year-over-year.

• No interim dividend was declared for 1H 2024.

Financial highlights

• Revenue from property sales was RMB23.17 billion, down 5.0% year-over-year, accounting for 79.4% of total revenue.

• Hotel operation income rose 1.4% to RMB1.07 billion; property management and others increased 1.0% to RMB4.12 billion.

• Commercial properties operation income declined 4.1% to RMB826 million.

• Cost of sales increased 7.0% to RMB29.18 billion, mainly due to higher impairment provisions.

• Net finance costs remained stable at RMB8.63 billion.

Outlook and guidance

• Management is focused on accelerating sales and delivery of existing inventory, asset revitalization, and prudent resource allocation.

• Offshore debt restructuring is ongoing, with constructive creditor dialogues and government support for project financing.

• The company aims to resolve pending litigations and seek asset disposals to improve liquidity.