Ronshine China (3301) H1 2024 earnings summary

Executive summary

• Revenue increased by 6.55% year-over-year to RMB14.20 billion, driven by higher property delivery revenue and rental income.

• Gross profit rebounded to RMB2.91 billion from a loss of RMB74 million in the prior year, with gross margin improving to 20.51%.

• Net profit for the period was RMB80 million, compared to a net loss of RMB2.47 billion in the same period last year.

• Loss attributable to owners was RMB1.93 billion, while non-controlling interests recorded a profit of RMB2.01 billion.

• Contracted sales dropped 65.66% year-over-year to RMB3.36 billion, reflecting continued market weakness.

Financial highlights

• Cost of sales fell 15.77% to RMB11.29 billion, reflecting lower GFA delivered.

• Net finance costs increased to RMB1.49 billion, mainly due to exchange losses.

• Income tax expenses rose 114.49% to RMB886 million, driven by higher CIT and LAT.

• Cash and bank balances stood at RMB4.74 billion, with total borrowings at RMB39.3 billion and a weighted average interest rate of 6.11%.

• Selling and marketing costs fell 66.85% to RMB116.90 million; administrative expenses were flat at RMB360.40 million.

Outlook and guidance

• Management expects government policy support to gradually stabilize the real estate market in the second half of 2024, especially in first- and core second-tier cities.

• The Group will focus on core regions, prudent land acquisition, and operational efficiency to ensure project delivery and long-term stability.