Shui On Land (272) H2 2024 earnings summary

Executive summary

• Maintained profitability in 2024 with RMB 810 million net profit and RMB 180 million profit attributable to shareholders, despite a 78% year-on-year decline due to fewer residential completions and reduced property sales.

• Board recommended a final dividend of HKD 0.036 per share, down from HKD 0.09 in 2023.

• Strong sales at Lakeville VI, with 108 units sold in one day and contracted sales up 32% year-on-year to RMB 15.055 billion, setting a new sales record in Shanghai.

• Total rental and related income (including JVs/associates) rose 9% year-on-year to RMB 3.54 billion, driven by new commercial openings in Shanghai.

• Asset-light strategy and prudent capital management remain priorities, with new partnerships and management contracts signed.

Financial highlights

• Revenue for 2024 was RMB 8.173 billion, down 16% year-on-year, mainly due to fewer residential project completions.

• Gross profit increased 4% to RMB 5.228 billion, with gross margin rising to 64% from 52% last year.

• Net profit margin declined to 10% from 14%; earnings per share dropped to RMB 2.2 cents from RMB 10.1 cents.

• Net gearing ratio stable at 52%; cash and bank deposits at RMB 7.734 billion.

• Average cost of debt reduced to 4.9% from 5.7% in 2023.

Outlook and guidance

• Cautious outlook as China’s property market undergoes structural corrections and uncertainties persist, with a focus on Shanghai and best-in-class product strategy.

• Asset-light strategy to continue until market correction completes, with expansion of management contracts and brand leadership in Shanghai.

• Anticipates further sales growth from upcoming Lakeville VI and Riverview projects, and targeted new launches in Shanghai in 2025 and beyond.

• Management expects breathing room in liquidity for the next 6–9 months.

• Liquidity management and financial safety remain top priorities, with expansion to the Greater Bay Area.