China Overseas Land & Investment (0688) H2 2023 earnings summary

Executive summary

• Revenue rose 12.3% YoY to RMB202.52bn; profit attributable to shareholders increased 10.1% to RMB25.61bn, while core profit was RMB23.65bn.

• Contracted sales rose 5.1% to RMB309.81bn despite market weakness; sales area fell 3.7% to 13.36m sq m.

• Market share increased 0.29pp to 2.66%; sales ranked No. 3 by gross sales and No. 2 by attributable sales.

Financial highlights

• Revenue was RMB202.52bn; profit before tax was RMB41.12bn, up 14.2%, and operating profit was RMB40.53bn.

• Profit after deducting after-tax investment-property revaluation gains rose 12.1% to RMB22.58bn; basic EPS increased 10.1% to RMB2.34.

• Gross profit margin was 20.3%; attributable net profit margin was 12.6%. SG&A was 3.4% of revenue, down 0.2pp YoY.

• Total comprehensive income rose to RMB26.76bn from RMB23.08bn; final dividend was HK45 cents per share and full-year dividend was HK80 cents.

Outlook and guidance

• FY2024 saleable resources are targeted at RMB702.4bn; contracted sales are expected to grow steadily.

• Commercial-property revenue is expected to grow 25% in 2024, following 20.9% growth in 2023.

• Planned launches include East Jianguo Road and Xuhui in Shanghai, CITIC Town in Beijing, and Super Headquarters Base in Shenzhen and Shangchong in Guangzhou.

• Management cited policy support for housing demand and urban renewal, while noting that industry transition and market adjustment will take time.