Country Garden Services Holdings Company (6098) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 was RMB21,046.2 million, up 1.5% year-over-year, with growth in property management and community value-added services offset by declines in other segments.

• Net profit dropped 37.9% year-over-year to RMB1,545.6 million, and core net profit attributable to owners fell 31.7% to RMB1,840.0 million.

• Gross profit margin declined to 21.2% from 24.9% year-over-year, mainly due to credit risk adjustments, higher costs, and prudent revenue recognition for risky customers.

• Net cash from operating activities plunged 87.7% to RMB270.3 million, mainly due to lower profits and increased receivables.

• No interim dividend declared for the period; a final and special dividend for 2023 totaling RMB984.85 million was approved and will be paid in August 2024.

Financial highlights

• Property management services revenue rose 4.6% to RMB12,751.9 million, accounting for 60.6% of total revenue.

• Community value-added services revenue increased 6.0% to RMB1,997.8 million, 9.5% of total revenue.

• Value-added services to non-property owners fell 63.4% to RMB355.5 million.

• "Three Supplies and Property Management" revenue grew 30.6% to RMB2,467.2 million; heat supply services up 8.0% to RMB877.4 million.

• City services revenue decreased 9.4% to RMB2,170.0 million; commercial operational services revenue dropped 37.9% to RMB331.6 million.

Outlook and guidance

• Focus remains on customer satisfaction, digitalization, and expanding "property services + lifestyle services".

• Plans to increase investment in digital and intelligent IoT, mass-produce cleaning robots, and enhance elevator IoT management.

• Measures to improve cash flow include enhanced fee collection, prepayment promotion, and a new debt recovery committee.

• Continued emphasis on sustainable development and community renewal initiatives.