Lushang Life Services (2376) H1 2023 earnings summary

Executive summary

• H1 revenue fell 3.2% YoY to RMB314.0m; net profit declined 24.5% to RMB30.8m as weaker developer-related services outweighed growth in property management and community services.

• Managed GFA rose 1.5% YoY to 23.8m sq.m. across 96 projects; contracted area increased 1.0% to 27.4m sq.m.

• No interim dividend was declared.

Financial highlights

• Revenue was RMB314.0m versus RMB324.4m; gross profit fell 12.2% to RMB67.9m and gross margin declined to 21.6% from 23.9%.

• Profit attributable to owners was RMB30.0m, down 25.2%; basic and diluted EPS were RMB0.23 versus RMB0.40.

• Operating profit was RMB39.2m versus RMB52.1m; total profit was RMB39.1m versus RMB52.2m.

• Cost of sales declined 0.4% to RMB246.1m; management and R&D expenses rose 3.4% to RMB22.3m.

Outlook and guidance

• Shandong remained the strategic development focus, with expansion also reaching Beijing and Harbin and coverage across nearly all prefecture-level cities in Shandong.

• Plans included continuing to identify business-development opportunities; no material investment or capital-asset plan was in place during H1.

• Collection measures were to continue in response to slower trade-receivable collections amid real estate and economic headwinds.

• Full completion of Lushang Freda’s real estate business disposal was expected in October 2023; it was not complete at the interim report date.