Greentown Service Group (2869) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 rose 10.6% year-over-year to RMB9,068.4 million, with net profit up 21.0% to RMB523.1 million and profit attributable to equity shareholders up 21.5% to RMB504.7 million.

• Property services remained the largest contributor, accounting for 66.4% of revenue.

• Gross profit increased 14.0% to RMB1,744.0 million, with gross margin improving to 19.2% from 18.7% year-over-year.

• Core operating profit grew 25.8% to RMB892.6 million, outpacing revenue growth due to effective cost control.

• No interim dividend was declared for the period.

Financial highlights

• Gross profit margin for property services rose to 14.9% (+1.1ppt), consulting services to 32.1% (+2.0ppt), and technology services to 38.7% (+2.1ppt), while community living services margin slightly declined to 23.9% (-0.4ppt).

• Net profit margin improved to 5.8% from 5.3% year-over-year.

• Administrative expense ratio decreased by 0.6ppt to 7.6% due to organizational streamlining.

• Cash and cash equivalents at period end were RMB3,026.5 million, down 33.2% from year-end 2023, as more funds were allocated to time deposits.

• Basic earnings per share were RMB0.16, up from RMB0.13 year-over-year.

Outlook and guidance

• Management expects continued high-quality development, focusing on efficiency, safety margin, growth resilience, and shareholder returns amid a challenging macro environment.

• Strategic priorities include deepening reforms, enhancing operational quality, and leveraging digital transformation.

• The company aims to further establish its reputation for high safety margin, growth resilience, and shareholder returns.