Zhong An Group (672) H1 2024 earnings summary

Executive summary

• Revenue surged 127.6% year-over-year to RMB9,282.9 million for the six months ended 30 June 2024, driven by increased property deliveries.

• Gross profit rose 161.7% year-over-year to RMB1,830.0 million, with gross margin improving to 19.7% from 17.1%.

• Net profit declined 24.5% year-over-year to RMB117.9 million, mainly due to higher tax expenses and fair value losses on investment properties.

• Contracted sales dropped 61.4% to RMB2,875.0 million, reflecting challenging market conditions.

• No interim dividend was declared for the period.

Financial highlights

• Recognised property sales reached RMB8,920.8 million, up 145.9% year-over-year; contracted sales were RMB2,875.0 million, down 61.4%.

• Average property sales price per sq.m. increased 3.9% year-over-year to RMB21,528, while average sales cost per sq.m. decreased 5.2% to RMB16,843.

• Property management revenue grew 24.1% year-over-year to RMB1,534 million.

• Cash and cash equivalents plus restricted cash stood at RMB1,913.6 million as of 30 June 2024.

• Net gearing ratio was 44.8%, and average financing cost dropped to 4.5%.

Outlook and guidance

• The company expects gradual recovery in property sales in the second half of 2024 as buyer confidence improves.

• Management expects continued policy support and market stabilization in China's real estate sector in the second half of 2024.

• Focus remains on quality, cost control, and leveraging regional brand advantages in the Yangtze River Delta.

• Will continue to pursue prudent financial policy, digitalization, and diversified development.