SOHO China (410) H1 2024 earnings summary

Executive summary

• Holds 1.22 million sqm of prime commercial properties in Beijing and Shanghai, with a diverse tenant mix and stable rental income.

• Revenue for H1 2024 was RMB799 million, down 2.7% year-over-year due to weak office and retail leasing demand.

• Gross profit margin from property leasing remained stable at 82%; gross profit was RMB648 million, down 4.39% year-over-year.

• Net loss attributable to owners was RMB108 million, compared to a profit of RMB14 million in H1 2023.

• Maintains robust operating cash flow and a stable occupancy rate of 76% as of June 30, 2024, despite challenging market conditions.

Financial highlights

• Revenue for H1 2024 was RMB799 million (↓2.7% YoY); rental income accounted for RMB796 million.

• Gross profit was RMB648 million (↓4.39% YoY); gross margin at 82%.

• Underlying profit from operating activities (excluding valuation changes and one-off tax fees) was RMB104 million; reported loss attributable to owners was RMB108 million.

• Finance expenses were RMB367 million, down from RMB387 million year-over-year.

• No interim dividend declared for the period.

Outlook and guidance

• Flexible leasing strategies and a mature asset portfolio are expected to provide value protection and resilience against market downturns.

• Market expected to face rising vacancy rates and continued pressure on leasing due to new supply and weak demand in Beijing and Shanghai.

• Company aims to improve cash flow through cost control, property disposals, and enhanced customer service.

• Macroeconomic policies may support a more stable recovery in the second half of 2024.

• Continued focus on sustainability and green initiatives to enhance long-term competitiveness.