SOHO China (410) H2 2023 earnings summary

Executive summary

• Prime commercial portfolio of 1.27 million sqm in Beijing and Shanghai; all projects completed, with diversified tenants and stable rental income.

• 2023 occupancy rose to 78% from 76%; rental income fell 4.2% YoY to RMB1,672m, while gross margin increased to 82% from 81%.

• Owners recorded a RMB180m loss versus RMB61m profit in 2022; operating profit excluding investment-property valuation changes and one-off tax and administrative fees was ~RMB269m.

Financial highlights

• Revenue was RMB1,679m, down 5.4% YoY; rental income was RMB1,672m, down 4.2%, and property-unit sales were RMB7m, down 77.4%.

• Gross profit was RMB1,379m, down 4.1% YoY; gross margin was 82%, versus 81% in 2022.

• Net loss attributable to owners was RMB180m in 2023, compared with net profit of RMB61m in 2022.

• Investment properties were RMB63,421m at year-end 2023, versus RMB63,785m at year-end 2022.

Segment performance

• Portfolio occupancy was 78% in 2023, up from 76% in 2022; rental income was RMB1,672m, compared with RMB1,745m in 2022.

• Each individual project contributed less than 20% of total rental income; tenants represented diverse industries, led by TMT, financial and professional services.

• The portfolio comprises prime-location office properties in Beijing and Shanghai, with 1.27 million sqm of commercial assets.