Sino-Ocean Group Holding (3377) H2 2024 earnings summary

Executive summary

• Revenue fell 49% year-over-year to RMB23,641 million, with a gross loss of RMB398 million and a gross loss margin of 2%.

• Loss attributable to owners was RMB18,624 million, a 12% reduction from the prior year, mainly due to market downturn, impairments, and project disposals.

• Contracted sales dropped 30% to RMB35,160 million, with saleable GFA sold down 30% to 2,996,800 sq.m.

• The real estate market in China remained weak, but policy support in late 2024 led to some stabilization.

Financial highlights

• Property development revenue decreased 56% to RMB17,273 million, remaining the largest segment at 73% of total revenue.

• Property investment revenue declined 28% to RMB321 million; property management and related services fell 6% to RMB2,710 million.

• Cost of sales dropped 47% to RMB24,039 million, in line with revenue decline.

• Interest and other income decreased 18% to RMB700 million; other net losses surged to RMB4,651 million, mainly from impairments and fair value losses.

• Net impairment losses under expected credit loss model were RMB7,699 million, down from RMB11,283 million.

• Weighted average interest rate on borrowings decreased to 5.39%; total interest expenses paid/accrued were RMB5,299 million.

• Cash resources at year-end were RMB4,828 million; current ratio was 0.90.

Outlook and guidance

• Market stabilization is expected as supportive policies continue, but business transformation is seen as inevitable due to significant net asset losses and ongoing risk clearance.

• The company aims to resolve debt risks, ensure project delivery, and lower net gearing ratio as demand recovers.