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how have listed real estate companies performed in the first half of this year?

according to monitoring data from china index academy, in the first half of the year, the average operating income of 105 a-share and h-share listed real estate companies (excluding defaulting real estate companies) was 11.591 billion yuan, a year-on-year decrease of 13.00%; the average net profit was 145 million yuan, a year-on-year decrease of 82.05%.

the reporter of daily economic news noted that in the first half of this year, the profitability of listed real estate companies continued to weaken, and net profits declined significantly. among them, 72 real estate companies saw a year-on-year decline in revenue, and 87 real estate companies saw a year-on-year decline in net profits. in addition, a total of 50 real estate companies suffered losses, of which 24 suffered losses for the first time since the epidemic.

based on wind data, a reporter from the china business network sorted out the first-half performance of 150 a-share and h-share listed real estate companies and found that only 44 companies achieved year-on-year growth in operating income, while about 70% of companies saw a year-on-year decrease; in terms of net profit attributable to shareholders, 29 companies (about 20%) achieved year-on-year growth, while the rest of the companies all saw a year-on-year decline.

"the profit margins of the real estate industry are still continuing to weaken. affected by weak market demand, further declines in housing prices, intensified market competition and other factors, real estate companies' sales have been hindered. 'trading price for volume' has become a common means of destocking, which in turn has led to insufficient growth momentum in revenue scale and pressure on profit levels." liu shui, director of corporate research at china index academy, believes that real estate companies' continued impairment provisions for investment properties and inventory have also had a certain erosion on the industry's profit level.

1

70% of real estate companies saw a year-on-year decrease in revenue

based on wind data, the reporter of china business news sorted out the performance of 150 a-share and h-share listed real estate companies in the first half of the year.

in the first half of the year, the top ten real estate companies in terms of operating revenue were vanke, poly developments, greenland holdings, china land, china resources land, greentown china, china merchants shekou, longfor group, sunac china and xincheng holdings. the revenue threshold for the top ten real estate companies was 33.904 billion yuan.

compared with the same period last year, only 44 real estate companies including huali family, sanxiang impression, zhongjun group, financial street and greentown china achieved growth in operating income, and about 70% of real estate companies saw a decrease in revenue in the first half of the year.

performance of some listed real estate companies in the first half of 2024 source: wind

in terms of net profit attributable to parent companies, the top ten real estate companies are china aoyuan, china land, china resources land, cheung kong group, poly developments, longfor group, sino group, greenland china, xinhu zhongbao and china merchants shekou. the threshold value of net profit attributable to parent companies for the top ten real estate companies is 1.417 billion yuan.

compared with the same period last year, 29 real estate companies including china aoyuan, china jinmao, xinhui holdings group, beijing energy investment, sunac china and yuzhou group achieved an increase in net profit attributable to their parent companies in the first half of the year, while the net profit attributable to their parent companies of the remaining real estate companies all declined.

the interim report shows that rongsheng development's net profit in the first half of the year fell to -317 million yuan, turning from profit to loss year-on-year; shimao group's shareholders should account for a loss of 22.668 billion yuan, compared with a loss of 12.058 billion yuan in the same period last year.

tianfeng securities has compiled the performance of 113 a-share listed real estate companies in the first half of the year. among them, 7 large, 28 medium and 78 small real estate companies achieved a total operating income of 880 billion yuan in the first half of the year, a year-on-year decline of 20.62%; the year-on-year growth rates of revenue of large, medium and small real estate companies were -13.3%, -24.10% and -25.85% respectively. the net profit attributable to the parent company totaled a loss of 35.2 billion yuan, a year-on-year decline of 291.72%; the year-on-year growth rates of large and medium-sized real estate companies were -98.96% and -78.94% respectively, and the losses of small real estate companies expanded by 60.61%.

in the first half of the year, the average gross profit margin of 113 a-share listed real estate companies was 14.78%, down 2.75 percentage points from the same period last year; the average gross profit margins of large, medium and small real estate companies were 12.87%, 17.08% and 14.59% respectively, down 7.05, up 0.10 and down 0.41 percentage points respectively compared with the same period last year.

tianfeng securities said in a research report that the decline in both revenue and profit in the real estate industry was mainly due to overall weak sales and weak housing prices, which led to a decline in carry-over profits and net inventory value. in the short term, the performance pressure on real estate companies may continue for some time. the decline in gross profit margins of large real estate companies may be mainly due to the fact that they adopted a "price-for-volume" approach in order to maintain their market share, which affected the carry-over profit margin. at the same time, the high land prices before 2022 also dragged down the performance.

2

the scale of interest-bearing debt has been reduced

faced with weak sales, real estate developers have taken measures to reduce their debt.

according to statistics from industrial securities, as of the end of the first half of the year, the asset-liability ratio of listed companies in the real estate sector excluding prepayments was 68.5%, down 0.7 percentage points from the end of 2023; the net debt ratio was 76.3%, up 7.3 percentage points from the end of 2023; the cash-to-short-term debt ratio was 0.95, and 1.19 in 2023.

the scale of interest-bearing liabilities of listed real estate companies has further shrunk, down 2.6% year-on-year in the first half of the year. the scale of interest-bearing liabilities of first- and fourth-tier real estate companies in the real estate sector has increased year-on-year, with the growth rates of interest-bearing liabilities of first-, second-, third- and fourth-tier real estate companies being 2.7%, -5.2%, -7.4% and 1.0% respectively.

industrial securities pointed out in its research report that the financial indicators of high-quality real estate companies were more stable in the first half of the year, and the first-tier real estate companies were better than other tiers, especially in terms of net debt ratio and cash-to-short-term debt ratio. moreover, the decline in monetary funds of first-tier real estate companies was also lower than that of other tiers.

"we are optimistic about the cyclical resilience of leading real estate developers with extensive layout in core cities, the valuation elasticity of municipal investment and local state-owned enterprises catalyzed by the expectation of stockpiling, and the reversal opportunities of non-state-owned central enterprises and distressed real estate developers under multiple supports such as financing and stockpiling." the co-chief real estate analyst of tianfeng securities believes that the cumulative national real estate inventory has reached 119.73 million square meters, with sales accelerating in first-tier cities and slowing down in second-tier, third-tier and below cities.

recently, the political bureau of the cpc central committee and the work conference of the central bank have repeatedly emphasized the need to fully implement the work of "storing" existing commercial housing in the second half of the year. it is expected that other high-energy cities will follow suit quickly in the second half of the year. in addition, the supply side of land supply in core cities has shrunk significantly this year. "active" destocking methods such as storage and land supply reduction will accelerate the process of balancing the supply and demand relationship in various places. the policy goal may be to "stabilize prices."

reporters learned from the recent mid-term performance meetings held by real estate companies that destocking and ensuring delivery of buildings will remain the core tasks of many leading real estate companies in the future.