Yanlord Land Group (Z25) H1 2024 earnings summary

Executive summary

• Revenue for 1H 2024 rose 34.8% year-over-year to RMB19.953 billion, but gross profit fell 37.0% to RMB2.619 billion as gross margin dropped to 13.1% from 28.1%.

• Net loss for the period was RMB421 million, with a loss attributable to owners of RMB486 million, compared to a profit in 1H 2023, mainly due to property write-downs and increased impairment losses.

• Contracted pre-sales dropped 51.7% year-over-year to RMB10.303 billion, with GFA down 41.5%, but rebounded 107% quarter-on-quarter in Q2 2024.

• Total debt decreased 10.1% to RMB30.071 billion, and net gearing improved to 45.3%.

Financial highlights

• Revenue from property development increased 42.4% to RMB17.488 billion; property investment and hotel operations up 1.9% to RMB894 million; property management up 0.4% to RMB591 million.

• Gross profit margin declined by 15.0 percentage points to 13.1%; gross profit decreased 37% year-over-year to RMB2.62 billion.

• Net impairment losses on financial assets surged to RMB369 million from RMB3 million in 1H 2023.

• Write-downs on properties for sale and under development totaled RMB730 million in 1H 2024.

• Basic and diluted loss per share was RMB(25.16) cents, compared to earnings of RMB56.70 cents in 1H 2023.

Outlook and guidance

• Accumulated property contracted pre-sales pending recognition stood at RMB53.612 billion, to be recognized in 2H 2024 and beyond.

• New projects and batches are planned for launch in 2H 2024 across major Chinese cities, focusing on high-quality residential developments.

• Focus remains on expanding in high-growth cities in China and Singapore, with a diversified landbank across six economic regions.

• The Group aims to maintain a healthy cash position and prudent financial policies amid market volatility.

• PRC residential property investment and sales declined significantly in 1H 2024, but policy relaxation aims to stimulate demand.