Greentown China (3900) H1 2025 earnings summary

Executive summary

• Revenue for the first half of 2025 was RMB53.37 billion, down 23.3% year-over-year, mainly due to uneven delivery schedules and a 22.7% decrease in recognized sales area.

• Net profit attributable to shareholders dropped 89.7% to RMB210 million, impacted by lower revenue and RMB1.93 billion in asset impairment provisions.

• Contracted sales reached RMB122.2 billion, ranking second in the industry, with a high cash collection rate of 96%.

• The company maintained a solid financial position, with bank balances and cash at RMB66.8 billion, 2.9 times the balance of borrowings due within one year, and a record low short-term debt ratio of 16.3%.

• Operational efficiency improved through digital marketing, cost control, and streamlined organization, with a focus on destocking, quality delivery, and innovation.

Financial highlights

• Gross profit was RMB7.16 billion, down 21.4% year-over-year; gross profit margin improved to 13.4% from 13.1% last year.

• Earnings per share dropped to RMB0.08 from RMB0.81 in the prior year period.

• Net gearing ratio increased to 63.9% from 56.6% at year-end 2024; total borrowings rose to RMB143.0 billion.

• Cash and cash equivalents stood at RMB66.8 billion; cash to short-term debt coverage was 2.9x.

• No interim dividend declared for H1 2025.

Outlook and guidance

• The sector remains in a consolidation phase, with continued market adjustment expected in the second half of 2025.

• Strategic focus remains on prudent operations, premium land and products, risk management, and product quality.

• Eight key initiatives include expediting destocking, targeted investment, risk management, operational upgrades, product innovation, cost reduction, project management business development, and business concentration.

• Saleable value for self-investment projects in H2 2025 is RMB176.3 billion, with 83% in first- and second-tier cities.

• Emphasis on quality competition over scale, with continued urbanization and demand for better living standards supporting long-term growth.