Redco Healthy Living Company (2370) H1 2024 earnings summary

Executive summary

• H1 2024 revenue fell 9.0% YoY to RMB212.1m and net profit fell 63.3% to RMB7.7m; managed GFA grew 13.1% to 21.6m sq.m and contracted GFA rose 4.4% to 28.2m sq.m.

• Profitability weakened amid lower value-added service revenue, margin pressure and higher financial-asset impairment charges; the 2024 China Top 100 Property Management Companies ranking improved to 33rd from 35th.

Financial highlights

• Revenue was RMB212.1m, down 9.0% YoY, while cost of services declined 4.2% to RMB154.9m.

• Gross profit fell 19.9% to RMB57.2m and gross margin decreased to 27.0% from 30.6%.

• Operating profit was RMB10.8m versus RMB29.3m; profit before tax was RMB11.6m versus RMB29.2m.

• Net profit was RMB7.7m, down 63.3%; profit attributable to owners fell to RMB1.1m from RMB13.6m, and EPS was RMB0.54 cents versus RMB6.82 cents.

• Comprehensive income was RMB8.3m, down 60.8%; operating activities used RMB39.1m cash versus generating RMB61.7m in H1 2023.

Outlook and guidance

• H2 priorities include consolidating positions in developed regions, expanding projects through organic growth and resource integration, and deepening service innovation.

• Plans include expanding healthcare and smart technology, developing software and smart communities, growing community value-added services, and investing in green technology and low-carbon initiatives; no specific financial guidance was stated.