Yuexiu Property Company (123) H1 2024 earnings summary

Executive summary

• Revenue increased 10.1% year-over-year to RMB35.34 billion, but profit attributable to equity holders declined 15.9% to RMB1.83 billion and core net profit fell 18.8% to RMB1.74 billion.

• Gross profit margin dropped by 4.1 percentage points to 13.7%.

• Contracted sales value decreased 33.8% year-over-year to RMB55.40 billion, achieving 37.7% of the full-year target.

• Interim dividend per share was HKD0.189 (RMB0.173), down 18.8% year-over-year, with a payout ratio of 40% of core net profit.

• Maintained a safe financial position with all “Three Red Lines” indicators in the green and net operating cash inflow of RMB6.13 billion.

Financial highlights

• Gross profit was RMB4.85 billion, down 15.0% year-over-year.

• Core net profit margin was 4.9%.

• Cash and equivalents, time deposits, and restricted deposits totaled RMB48.14 billion, up 4.4% from year-beginning.

• Total borrowings rose 5.6% to RMB110.24 billion compared to year-end 2023.

• Weighted average borrowing interest rate decreased to 3.57% from 3.98% year-over-year.

Outlook and guidance

• Management expects further policy relaxation and local government support for real estate in H2 2024.

• Focus remains on destocking, investment optimization, cost control, and prudent investment in tier-1 and quality tier-2 cities.

• The Group aims to achieve annual sales and operational targets through refined management and targeted sales strategies.