Shui On Land (272) H1 2024 earnings summary

Executive summary

• Maintained profitability in 1H 2024 with net profit of RMB183 million and profit attributable to shareholders of RMB72 million, despite a significant year-on-year decline due to a lack of new residential completions and weak property sales.

• Commercial property portfolio remained resilient, with rental and related income up 16% year-on-year, driven by new project openings in Shanghai.

• Prudent capital management continued, with net gearing ratio at 53% and cash and bank deposits totaling RMB10.5 billion as of June 30, 2024.

• Recognized for sustainability, including 100% renewable electricity for Shanghai Taipingqiao/Xintiandi and awards such as the Climate Leadership Award.

• No interim dividend declared for 1H 2024.

Financial highlights

• Revenue for 1H 2024 was RMB2,073 million, down 68% year-on-year, mainly due to a 97% drop in recognized property sales to RMB143 million.

• Rental and related income rose 16% year-on-year to RMB1,764 million, with strong contributions from Shanghai projects.

• Gross profit fell 54% to RMB1,355 million, but gross margin improved to 65% due to higher rental income share.

• Net gearing ratio increased slightly to 53% as of June 30, 2024.

• Cash and bank deposits totaled RMB10,543 million.

Outlook and guidance

• The business outlook remains cautious, with slow recovery expected in the China real estate market due to ongoing uncertainties and tight liquidity.

• Focus remains on cash preservation, prudent capital management, and reviewing debt strategies.

• Major residential launches in Shanghai, including Riverville and Lakeville Phase VI, are planned for 2H 2024.