Evergrande Property Services Group (6666) H1 2024 earnings summary

Executive summary

• Operating revenue for the six months ended 30 June 2024 reached RMB6,220.2 million, up 1.2% year-over-year, with steady expansion in management scale and improved financial position.

• Gross profit declined 16.2% to RMB1,256.1 million and net profit dropped 36.8% to RMB499.8 million, mainly due to increased investment in project facilities, prudent revenue recognition, and non-operating expenses.

• Asset management and community living services segments showed robust growth, while community operation services revenue fell sharply.

• The Group's total contracted GFA reached 794 million sq.m., with GFA under management at 555 million sq.m.; newly signed third-party GFA exceeded 21 million sq.m., up over 40% year-over-year.

• No interim dividend was declared for the period.

Financial highlights

• Revenue: RMB6,220.2 million (+1.2% YoY); gross profit: RMB1,256.1 million (-16.2% YoY); net profit: RMB499.8 million (-36.8% YoY); net profit margin: 8.0% (-4.9pp YoY).

• Basic EPS: RMB0.05 (vs. RMB0.07 in 1H 2023); profit attributable to owners: RMB500.5 million (-35.9% YoY).

• Gross profit margin fell to 20.2% from 24.4% a year earlier due to higher costs and prudent revenue recognition.

• Administrative expenses rose 33.2% to RMB519.7 million, mainly from legal and tax-related costs.

• Total bank deposits and cash: RMB2,445.6 million (+RMB439.1 million from end-2023).

Outlook and guidance

• Focus remains on high-quality, sustainable growth, efficiency enhancement, and service quality improvement amid industry competition and upstream market contraction.

• Strategic certainty, innovation, and customer-centric service are emphasized, with priorities including expanding premium projects, asset management, digital transformation, and talent development.

• Management expects continued improvement in financial position and operational efficiency.

• No interim dividend declared for the period.