Sunac China (1918) H2 2024 earnings summary

Executive summary

• Revenue fell 52% year-over-year to RMB74.02 billion, mainly due to a sharp decline in property sales and delivery area amid a prolonged real estate downturn.

• Gross profit rebounded to RMB2.89 billion from a gross loss of RMB2.50 billion last year, driven by high-margin project deliveries and reduced impairment provisions.

• Loss attributable to owners widened to RMB25.70 billion from RMB7.97 billion, mainly due to lower debt restructuring gains compared to the prior year.

• The auditor issued a disclaimer of opinion due to multiple material uncertainties about going concern, including overdue borrowings, litigation, and liquidity risks.

Financial highlights

• Contracted sales (including JVs and associates) were RMB47.14 billion for the year.

• Cash balance at year-end was RMB19.75 billion, down from RMB24.62 billion; total borrowings declined to RMB259.67 billion from RMB277.83 billion.

• Gearing ratio rose to 81.3% from 75.2% due to reduced equity and persistent high debt.

• No final dividend was recommended for 2024.

Outlook and guidance

• Management expects gradual stabilization in core city real estate markets, but overall recovery may be protracted.

• Focus remains on guaranteed home delivery, debt restructuring, and asset revitalization, with plans to complete delivery of 60,000 homes in 2025.

• The company is pursuing comprehensive offshore debt restructuring and further project-level financing.