Greentown China (3900) H1 2024 earnings summary

Executive summary

• Revenue reached a record RMB69.56 billion in 1H2024, up 22.1% year-over-year, mainly driven by property sales and strong project delivery.

• Core net profit attributable to owners rose 27.5% to RMB4.95 billion, while reported profit attributable to owners declined 19.6% to RMB2.04–2.05 billion due to lower gross margins and higher impairment losses.

• Total contracted sales were RMB126.5 billion, ranking third in the industry, with a high cash collection rate of 103% and an attributable sales ratio of 71%.

• Cash balance reached a historical high of RMB75.13 billion as of June 30, 2024, supporting strong liquidity.

• Maintained a top industry position in sales, cash collection, and project management, focusing on core tier 1 & 2 cities.

Financial highlights

• Gross profit was RMB9.10 billion, down 8.2% year-over-year; gross margin declined to 13.1% from 17.4%.

• Property sales revenue was RMB63.76 billion, up 22.0% year-over-year; average selling price increased 4.5% to RMB24,100/sqm.

• Administrative expenses fell 7.3% to RMB1.69 billion, while selling expenses rose 33.4% to RMB1.13 billion.

• Finance costs dropped to RMB1.30 billion, with weighted average interest cost reduced to 4.0%.

• No interim dividend was declared for 1H2024.

Outlook and guidance

• The company expects continued industry challenges in 2H2024 but sees opportunities as policy support increases and market stabilizes.

• Focus areas include refined destocking, prudent capital management, selective investment, product innovation, and management optimization.

• Sufficient saleable resources for 2H2024, with RMB169.0 billion in saleable value and a strong pipeline of new and inventory projects.