KWG Group (1813) H2 2024 earnings summary

Executive summary

• Revenue declined 30% year-over-year to RMB11,061.5 million, with all business segments experiencing decreases.

• Net loss for the year was RMB8,151.0 million, a significant improvement from RMB18,979.3 million in 2023.

• Gross profit rebounded to RMB1,888.8 million from a gross loss of RMB2,639.2 million last year, mainly due to lower cost of sales.

• The group faces severe liquidity challenges, with net current liabilities of RMB37,649.5 million and substantial borrowings in default.

Financial highlights

• Property development revenue fell 32.6% to RMB9,462.4 million; property investment revenue dropped 4.6% to RMB888.1 million; hotel operation revenue decreased 14.2% to RMB711.0 million.

• Cost of sales decreased 50.3% to RMB9,172.8 million, reflecting lower GFA delivered and reduced construction costs.

• Other income and gains declined 22.9% to RMB522.1 million.

• Selling and marketing expenses and administrative expenses decreased by 34.0% and 21.0%, respectively.

• Fair value losses on investment properties were RMB1,890.3 million, reflecting market downturn.

• Finance costs rose slightly to RMB2,929.1 million.

• No final dividend declared for 2024.

Outlook and guidance

• Management expects continued policy support for the real estate sector, with a focus on stabilizing the market and boosting demand.

• The group will prioritize debt management, capital structure optimization, and cash collection from sales.

• Plans include accelerating property sales, asset disposals, and ongoing negotiations for debt restructuring.