Shui On Land (272) H2 2023 earnings summary

Executive summary

• Revenue fell 37% to RMB9,752m; net profit was RMB1,397m and profit attributable to shareholders was RMB810m.

• Rental and related income, including JVs and associates, rose 16% to RMB3,243m, supported by Panlong Tiandi and Hong Shou Fang openings.

• Contracted sales fell 58% to RMB11,396m; RMB9,055m of locked-in sales was available for delivery and recognition in 2024 and beyond.

Financial highlights

• Revenue was RMB9,752m, down 37%; recognized property sales revenue fell 50% to RMB5,898m, while rental and related income rose 16% to RMB2,398m.

• Gross profit fell 24% to RMB5,045m, while gross margin rose to 52% from 43%.

• Profit for the year was RMB1,397m, down 5%; profit attributable to shareholders was RMB810m, down 11%.

• Adjusted core earnings fell 25% to RMB931m; shareholder profit before revaluation was RMB931m, down 17%.

• Basic EPS was RMB10.1 cents; FY2023 dividend was HKD0.09/share, including a final dividend of HKD0.058/share.

Outlook and guidance

• Residential sale and pre-sale pipeline for 2024 totaled 252,800 sq.m. GFA across eight projects, including 130,800 sq.m. attributable GFA; launch timing depends on construction, market conditions and approvals.

• Shanghai Yangpu Binjiang pre-sale was targeted for H2 2024, and Shanghai Taipingqiao Lot 122 was planned for sale in Q4 2024.

• Priorities included financial discipline, customer focus, quality products and asset-light growth; selective opportunities were sought in tier-1 and strong tier-2 cities, particularly Shanghai.

• CPIC XINTIANDI Lot 123/124 office towers and retail podium were scheduled for completion in 2024 and 2025, respectively.