China Overseas Land & Investment (0688) H1 2024 earnings summary

Executive summary

• Contracted sales reached RMB148.38 billion in 1H2024, ranking No.2 in gross sales and No.1 in attributable sales, with market share up to 3.15% and strong performance in first-tier cities.

• Revenue for 1H2024 was RMB86.94 billion, with core net profit attributable to shareholders at RMB10.64 billion and profit attributable to owners at RMB10.31 billion.

• S&P Global upgraded the credit rating to A-/Stable, making it the only Chinese mainland property developer with double-A international ratings.

• Commercial operations revenue grew 19.8% year-over-year to RMB3.54 billion, driven by strong results in first- and second-tier cities.

• Interim dividend of HK30 cents per share declared for the period.

Financial highlights

• Gross profit margin was 22.1%, and core net profit margin attributable to shareholders was 12.2%; net profit margin attributable to owners was 11.9%.

• Revenue decreased to RMB86.94 billion from RMB89.16 billion year-over-year; profit attributable to owners fell to RMB10.31 billion from RMB13.49 billion.

• SG&A as a percentage of revenue was 3.9%; average borrowing cost was 3.5%, among the lowest in the industry.

• Cash on hand stood at RMB100.24 billion; net gearing ratio at 38.7%; current ratio was 2.4x.

• Unbooked pre-sales reached RMB254.1 billion, up 7.1% from end-2023.

Outlook and guidance

• The group expects continued pressure on the domestic economy and property market but remains confident in long-term resilience and opportunities in first- and second-tier cities.

• Focus remains on disciplined investment, high-quality development, cost efficiency, and capturing demand for better housing.

• Strategy emphasizes balancing development and prudence, maintaining financial stability, and enhancing operational efficiency.