highlights of real estate companies' interim reports
2024-09-16
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the deep adjustment of the real estate market has objectively accelerated the transformation of the real estate model. hua shao/graphic
the 2024 interim report season for listed real estate companies has come to an end. as of now, more than 100 listed real estate companies have released their interim performance reports. judging from their performance, various indicators such as operating income, gross profit margin, and net profit of listed real estate companies have generally declined. among them, 76 listed real estate companies achieved profits, 87 suffered losses, and more than half of the companies were loss-making.the continuous adjustment of the real estate market has brought tremendous pressure on the operation of real estate companies. the revenue and profit of traditional real estate development and sales business have fallen sharply. under pressure, more and more real estate companies have begun to seek model transformation outside of traditional business. from the semi-annual reports of listed real estate companies, although the development business has declined significantly, commercial real estate operations, housing leasing, property services, house construction and other businesses have provided strong support for the operation of real estate companies. real estate operations and services have become new profit growth points for real estate companies.1. commercial real estate becomes the second growth curve of real estate companiescommercial real estate has undergone continuous and in-depth adjustments since 2017, gradually transforming from a horizontal expansion model of large-scale land acquisition to a light-asset operation model of upgrading existing properties, and its operating efficiency has stabilized and rebounded. although the overall real estate market is facing pressure, the commercial and retail sectors have shown strong resilience, especially some leading commercial real estate companies, which have made commercial real estate the second growth curve of their companies by virtue of their high-quality properties in core cities and their strong operating capabilities.take china resources as an example. in the first half of the year, china resources land achieved a turnover of 79.13 billion yuan, of which recurring income totaled 20 billion yuan. although recurring income only accounted for 25.3% of the total turnover, it contributed 51.4% of the core net profit, exceeding the real estate development and sales business for the first time. commercial real estate has become its second growth curve in name only. in terms of gross profit margin, its real estate development and sales gross profit margin was only 12.4%, while the gross profit margin of operating real estate business reached 71.5%.china merchants shekou's commercial real estate operation business also provides strong support for the company's performance. in the first half of 2024, the company achieved operating income of 51.27 billion yuan, a slight year-on-year decline of 0.33%. in terms of sectors, the development business achieved 39.9 billion yuan, a year-on-year decline of 4.15%; the asset operation sector achieved 3.1 billion yuan, a year-on-year increase of 13.05%; and the urban service sector achieved 8.27 billion yuan, a year-on-year increase of 14.94%.longfor group, a top private real estate developer, achieved operating revenue of 46.86 billion yuan in the first half of the year, of which operations and service businesses achieved a total revenue of 13.1 billion yuan, accounting for 28%, a year-on-year increase of 7.6%. although the revenue accounted for less than 30%, the operating business and property management services contributed 6.8 billion yuan, accounting for more than 80% of the group's profit structure. chen xuping, chairman of the board and ceo of longfor group, said at the mid-term results conference that it is expected that by the end of 2028, the group's operating income will account for more than half, and longfor's entire business will switch to a new development model.the contribution rate of commercial real estate to the overall performance of sunac china holdings is also rising. the "residential + commercial" dual-wheel drive strategy continues to consolidate sunac china holdings' competitive advantage in the industry. in the first half of this year, the company achieved a total commercial operating income of 6.212 billion yuan, a year-on-year increase of about 19.44%; achieved a non-tax property rental and management income of 5.804 billion yuan, accounting for 17% of the company's operating income; the gross profit of property rental and management business was 4.191 billion yuan, accounting for 57% of the company's total gross profit, up from 43% in the same period last year; the gross profit margin of property rental and management reached 72%.yuexiu property is also a company that is driven by the dual wheels of "residential + commercial". in the first half of the year, its total operating income from commercial properties was 1.331 billion yuan, up 4.8% year-on-year; of which direct commercial leasing income was 297 million yuan, up 41.3% year-on-year; the rest was contributed by yuexiu property trust. the "real estate + fund" dual-platform interactive model built by yuexiu property and yuexiu property trust effectively realizes the complete chain of commercial real estate investment, financing, management and withdrawal, forming a coordinated development.vanke, the leader in residential development, suffered a setback in the real estate market this year, with a net loss of 9.8 billion yuan in the first half of the year. however, judging from the semi-annual report data, the commercial sector is still a track for sustained profitability. during the reporting period, vanke's commercial business (including non-consolidated projects) had an operating income of 4.59 billion yuan, a year-on-year increase of 6.7%. among them, the commercial projects managed by intime had an operating income of 2.71 billion yuan, and the overall occupancy rate was 94.2%.in addition, china overseas land & investment, a leading state-owned enterprise, achieved commercial property revenue of 3.54 billion yuan in the first half of 2024, a year-on-year increase of 20%.2. housing rental becomes the focus of real estate companiesreal estate has entered the era of stock. the establishment of a housing system of "renting and purchasing" has created new opportunities for the development of my country's housing rental market and opened up a new path for the transformation of real estate business. the housing needs of 300 million new citizens, low-income groups in cities and young people in the process of new urbanization have formed a strong support for the housing rental market. in the second quarter monetary policy implementation report, the central bank stated that in the next stage, it is necessary to continue to play a good role in promoting the housing rental industry through supporting policies, improve the housing rental financial support system, and fully mobilize the enthusiasm of market-oriented institutions. through the investment of more social funds, a sustainable business model will be established to support the destocking of existing commodity housing and help promote the transformation and development of the real estate industry.after experiencing irrational development from 2015 to 2018 and the subsequent large-scale reshuffle, the long-term rental housing market has gradually returned from disorderly development to rationality and standardization. from the semi-annual reports of real estate companies, it can be seen that more and more real estate companies are taking housing rental as a track for continued in-depth development.in terms of long-term rental apartments, china merchants shekou has deployed in 19 cities, with an operating construction area of about 1.33 million square meters for projects that have been opened, and a total of 32,400 rooms; the planned construction area of projects in the construction period is about 830,000 square meters. in the first half of 2024, china merchants shekou's long-term rental apartment business operating income was 629 million yuan, and the occupancy rate of apartments opened for more than one year reached 90%. during the reporting period, the company used the two high-quality projects of yizhan prince bay and yizhan linxia as the underlying assets to carry out the application and issuance of infrastructure public reits, which have been reviewed and approved by relevant departments.in the long-term rental apartment market, china overseas land & investment achieved operating income of 120 million yuan in the first half of the year, a year-on-year increase of 57%. the company has 11 long-term rental apartment layouts, 21 projects have been opened, and the total scale of expansion has reached 730,000 square meters. the rental rate of houses for more than 6 months is 96%. this growth reflects the success of china overseas land & investment's strategic layout and market expansion in the long-term rental apartment field. its long-term rental apartment business is gradually becoming an important part of the company's revenue.in 2018, vanke began to identify housing rental as its core business. in a market environment with shrinking demand and sluggish sales, the "sale-to-rent" model explored by vanke has become an important means to revitalize existing assets. from the perspective of rental housing business, vanke's "park yu" achieved operating income of 1.73 billion yuan in the first half of the year, a year-on-year increase of 5.3%. as of the end of june, park yu had operated and managed a total of 242,000 rental houses in 29 cities across the country, with a total of 183,000 opened. the management scale of centralized long-term rental apartments has reached the first place in the country, and the occupancy rate has reached 95.2%. at the same time, vanke's long-term rental business has made great progress in operating efficiency, building its own channels and serving customers. this year, 15,000 new houses have been expanded, and strategic cooperation intentions have been reached with state-owned assets and state-owned enterprises in many cities. the total number of cooperative houses in the future will exceed 20,000. zhu jiusheng, president of vanke and chief partner of the long-term rental apartment division, said that he is firmly optimistic about the long-term rental apartment business and has always regarded long-term rental apartments as one of vanke's three core businesses.3. property services seek to break away from dependence on parent companiesagainst the backdrop of a sharp decline in real estate development business, the performance of the property service sector of real estate companies is remarkable. although the revenue has increased but the profit has not, it is still much better than real estate development and sales. judging from the semi-annual report data, the core business of property services has shown a steady growth trend. the total revenue of 62 listed property service companies reached 145.217 billion yuan, a year-on-year increase of 6.25%. among them, country garden services and vanke cloud ranked first and second in the industry with revenues of 21.046 billion yuan and 17.56 billion yuan respectively, while binjiang services led the industry with a year-on-year growth rate of 38.68%. in addition, the revenue growth rates of deshang industrial investment services, suxin services, yuexiu services, and caisheng life also reached 36.5%, 31.1%, 29.7%, and 28.5%, respectively, and their performance in the industry was relatively impressive.in the first half of the year, the gross profit margin of basic property services of key enterprises (excluding enterprises with developers' risks and losses) was 14.1%, an increase of 0.1 percentage points over the same period last year. they maintained good efficiency against the trend under the background of greater industry pressure. the net profit of key enterprises in the first half of 2024 increased by 12% year-on-year, which was the same as the growth rate of revenue. among them, china resources vanke's net profit was 1.92 billion yuan, ranking first.in terms of management scale, the total area under management of the 51 listed property companies that disclosed data reached 7.712 billion square meters, a year-on-year increase of 9.43%. among them, country garden services' area under management has exceeded 1 billion square meters, reaching 1.056 billion square meters.it can also be seen from the interim report that property service companies are gradually breaking away from their parent company's business dependence and showing an accelerating trend of independent development. more and more companies emphasize operational and financial independence, and enhance their market competitiveness by reducing their dependence on related-party businesses. companies such as evergrande property, sunac services, and world trade services have significantly reduced the proportion of revenue from related parties and increased their efforts to expand the third-party market. as of june 30, 2024, yongsheng service's managed area from third parties reached 180 million square meters, a year-on-year increase of 10.9%, accounting for 74.4% of the total managed area. in the first half of the year, the third-party business revenue of excellence business services increased by 17.0% year-on-year to 1.25 billion yuan, and the proportion of total revenue increased to 60%. compared with the same period in 2023, the proportion of third-party business revenue increased by 1.9 percentage points.4. the construction agency track has moved from a blue ocean to a red oceanreal estate construction agency is an important direction for real estate companies to transform into asset-light companies. according to incomplete statistics, more than 90 companies have been involved in the construction agency business. as leading real estate companies enter the market with their brand advantages, construction agency has also gone from a blue ocean to a red ocean where real estate companies compete fiercely.faced with fierce market competition, many companies have turned to the field of government construction to seek growth, and the scale of government construction has expanded rapidly. in the first half of 2024, the new scale of government construction by the top20 real estate companies exceeded 20 million square meters. in the construction business managed by china resources land, greenland holdings, guomao real estate, zhongtian meiyi, and songdu management, the government construction area accounts for more than 60%. in the first half of the year, china resources land's urban construction business achieved a turnover of rmb 390 million, with 358 projects under management at the end of the period, and the newly added government construction contract area in the first half of the year ranked second in the industry. with the launch of the "three major projects" such as urban village renovation and affordable housing construction, government construction projects will continue to be highly valued, and the industry is expected to continue to grow.in the field of commercial construction, greentown management's dominant position is still obvious. in the first half of the year, greentown management achieved operating income of 1.67 billion yuan, a year-on-year increase of 7.79%, and the gross profit margin remained at a high level of 51.52%. in particular, commercial construction contributed more than 78.4% to revenue. during the reporting period, the net profit margin fell slightly by 0.4 percentage points year-on-year to 29.42%, and the net profit margin attributable to the parent company was 30.02%, a slight decrease of 0.6 percentage points year-on-year. although it has declined year-on-year, it still shows strong profitability in the fierce market competition.as a real estate company ranked in the top 10 in terms of comprehensive strength, sunac china holdings has also established a construction and management business platform, "sunac china construction management", to continue to expand its development track. backed by the strategic layout and resource accumulation of its parent company, sunac china construction management has basically achieved a nationwide layout. as of the end of june, sunac china construction management has managed more than 90 projects with a total construction area of more than 13 million square meters, more than 50 commercial complex management projects, and more than 3.52 million square meters of new contracted area in the first half of the year.longfor dragon intelligent manufacturing is also a rapidly rising construction agency brand in the past two years. in the first half of this year, it added 26 construction agency projects with a total construction area of 4.32 million square meters. so far, longfor dragon intelligent manufacturing has accumulated more than 110 construction agency projects with a total construction area of more than 21 million square meters, and achieved sales of 4 billion yuan in the first half of the year.the profound adjustment of the real estate market has brought tremendous pressure to the operation of real estate companies. at the same time, it has also forced real estate companies to make strategic adjustments as soon as possible, find new tracks, explore new models, and improve new skills, which has objectively accelerated the formation of new real estate models.(this article was published in china real estate news on september 16, page 11. editor: su zhiyong)
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