Core Viewpoint - Greentown China reported a significant decline in both revenue and profit for the first half of 2025, with a notable 89.7% drop in shareholder profit, marking the worst performance in nearly two years. Despite this, the company aggressively expanded its project portfolio, investing 36.2 billion yuan in 35 new projects, elevating its sales ranking to second nationwide amidst a contracting industry [1][2]. Financial Performance - In the first half of 2025, Greentown China achieved revenue of 53.368 billion yuan, a decrease of 23.3% from 69.562 billion yuan in the same period of 2024 [2]. - The company's property sales revenue accounted for 93.0% of total income, with a significant drop in property sales revenue to 49.651 billion yuan, down 22.1% from 63.757 billion yuan year-on-year [2]. - The gross profit for the first half was 7.159 billion yuan, a decline of 21.4%, with shareholder profit plummeting to 210 million yuan from 2.045 billion yuan, a decrease of 89.7% [4]. Asset Impairment - Greentown China reported asset impairment losses of 1.933 billion yuan, which is nearly nine times the net profit for the first half, significantly impacting profitability [5]. - The company conducted impairment tests on certain properties, resulting in a non-financial asset impairment loss of 1.717 billion yuan, an increase of 20.7% from the previous year [4]. Land Acquisition and Sales Performance - The company acquired 35 new projects with a total construction area of approximately 3.55 million square meters, at a cost of about 36.2 billion yuan, ranking third in the industry for land acquisition [7]. - Greentown's total contract sales area reached approximately 5.35 million square meters, with a total contract sales amount of about 122.2 billion yuan, elevating its sales ranking to second nationwide [7]. Debt and Financial Health - As of June 30, 2025, Greentown's total borrowings increased to 1430.27 billion yuan from 1371.87 billion yuan at the end of 2024, leading to a rise in net debt to 762.32 billion yuan and a net debt-to-equity ratio of 63.9% [8]. - The company faces the challenge of balancing expansion with profitability, as it navigates the pressures of increased debt while striving for growth [8].

Core Viewpoint - Greentown China reported a significant decline in revenue and profit for the first half of the year, attributed to reduced area for revenue recognition and efforts to reduce long-term inventory, while maintaining a high collection rate of 96% [1][2] Financial Performance - Total revenue for the first half of the year was 53.368 billion, a year-on-year decrease of 23.28% - Shareholder profit was 210 million, down 89.74% year-on-year - Sales amount reached 122.2 billion, ranking the company second in the industry - Equity sales amounted to 53.9 billion, placing the company in the top five [1] Inventory Management - The company recognized an inventory impairment of 1.938 billion, with 1.717 billion related to subsidiaries, primarily from projects acquired in 2021 - The management emphasized that the pressure of inventory impairment is a challenge faced by all real estate companies, and Greentown has found its optimal solution [1][3] Sales Strategy - The company launched 17 new projects in the first half of the year, achieving a project realization rate of 88% and a de-stocking rate of 82%, both exceeding the full-year targets for 2024 - The sales strategy focused on balancing speed and price, with a comprehensive management upgrade across the project lifecycle [2][3] Project Acquisition - In the first half of the year, Greentown acquired 35 projects with a total construction area of 3.55 million square meters, generating over 90 billion in new value, with 88% of this value located in first and second-tier cities [3] Future Land Acquisition Strategy - The company plans to slow down its land acquisition pace in the second half of the year due to the volume acquired in the first half, adopting a more cautious and precise strategy for new projects [4] - The annual land acquisition target is expected to be adjusted dynamically based on sales performance and cash flow, estimated at around 120 billion [4] Industry Outlook and Company Strategy - Greentown China aims to maintain its strategic focus amidst industry changes, emphasizing three key principles: unwavering strategic determination, commitment to product quality, and prudent operations [5]

Investment Rating - The investment rating for the company is "Buy" and is maintained [10]. Core Views - The company experienced a significant decline in revenue and net profit in the first half of 2025, primarily due to uneven delivery schedules and substantial asset impairment losses [7][10]. - Despite the short-term pressure on performance, the company has shown notable improvements in operational margins, sales rankings, and financial stability, indicating a potential recovery in the future [7][10]. Summary by Sections Financial Performance - In 2025H, the company achieved revenue of 53.368 billion (down 23.3%) and a net profit of 210 million (down 89.7%), largely impacted by uneven delivery schedules and a significant asset impairment loss of 1.933 billion [7][10]. - The gross margin was 13.4%, slightly up from 13.1% year-on-year, but still at a low level [10]. - The company recorded a total sales amount of 122.2 billion (including entrusted construction), with self-invested sales amounting to 80.3 billion (down 6%), outperforming the industry average decline of 11% [10]. Sales and Market Position - The company improved its sales ranking to fifth in the industry, with new sales value ranking third [10]. - The average self-invested sales price was 34,984 per square meter, maintaining a high level [10]. - The company acquired 35 new projects in the first half of the year, with a total equity land acquisition amount of approximately 36.2 billion [10]. Financial Health - The average financing cost decreased to 3.60%, down 40 basis points from the previous year, indicating improved financial conditions [10]. - The debt structure has been optimized, with short-term debt accounting for 16.3%, the lowest in history [10]. - The company maintains a cash-to-short-term debt ratio of 2.7, indicating a strong financial position [10]. Future Outlook - The company forecasts net profits of 1 billion, 1.9 billion, and 4.2 billion for 2025, 2026, and 2027 respectively, with growth rates of -36%, +88%, and +118% [10]. - The overall performance is expected to remain under pressure in the short term, but operational improvements and brand influence are anticipated to gradually manifest [10].