Facing the profound adjustment in the real estate industry, steady development has become the best outcome for real estate companies at present.

On August 28, Guangzhou state-owned Yue Xiu Property released its interim performance report. In the first half of the year, it achieved a revenue of about 35.34 billion yuan, a year-on-year increase of 10.1%; the net profit attributable to the parent company was about 1.83 billion yuan, and the core net profit was about 1.74 billion yuan.

In terms of sales, in the first half of the year, Yue Xiu Property achieved a contract sales amount of about 55.4 billion yuan. Even though the industry is under great downward pressure, Yue Xiu Property has still set a sales target of 147 billion yuan for this year, which is a year-on-year increase of 3.5%, but the completion rate in the first half of the year is less than 40%.

At the performance release conference on the same day, Lin Zhaoyuan, chairman and executive director of Yue Xiu Property, frankly stated that there is a certain gap between the current sales performance and the plan, but in the market environment of deep adjustment, the company's performance in the industry is actually rising.

Yue Xiu Property is still a "top student" in the industry. According to CRIC data, in the first half of this year, calculated by contract sales amount (full scale), Yue Xiu Property's ranking in the industry rose from twelfth to ninth.

Advertisement

Lin Zhaoyuan said: "Facing the current market full of challenges, even though there are certain difficulties and pressures, the company still decided to maintain the annual sales target of 147 billion yuan unchanged."

It is reported that Yue Xiu Property will use this target internally to motivate and assess the team, adhere to the spirit of never giving up, and make the greatest effort to sprint.

In the current market environment facing severe challenges, this is a great test of the real estate company's ability to operate and invest in land.

In the first half of the year, Yue Xiu Property continued to adapt to changes, implemented a "one dish, one policy" marketing strategy and pricing strategy, and continued to consolidate its leading position in the Greater Bay Area market and the first place in the Guangzhou market share.

Data shows that in the first half of the year, Yue Xiu Property achieved a contract sales amount of about 26.11 billion yuan in the Greater Bay Area, accounting for about 47.1% of the total contract sales amount. The contract sales amount achieved in the East China region in the first half of the year was about 12.88 billion yuan, accounting for about 23.2% of the total contract sales amount.Regarding the "northward" entry into the Beijing market in recent years, the management of Yuexiu Property revealed, "This year, the company has set a sales target of 12 billion yuan for Beijing, and 5.6 billion yuan has been achieved in the first half of the year. Currently, the company's deployment in Beijing is generally in the northern part, and the sales turnover is quite good. We will continue to delve deeper into the city of Beijing."

In terms of investment and land acquisition, Yuexiu Property continues to maintain its composure.

In the first half of the year, Yuexiu Property added 12 new plots of land in key cities such as Beijing, Shanghai, Guangzhou, Hangzhou, Chengdu, and Hefei through the "6+1" diversified land reserve model, with a total construction area of about 17.2 million square meters.

At the same time, through the acquisition from its parent company, Yuexiu Group, Yuexiu Property added about 5.8 million square meters of TOD land reserves in the first half of the year.

Among the new land reserves added in the first half of the year, the land reserves obtained through the diversified land reserve model accounted for 66% of the new land reserves.

As of June 30, 2024, Yuexiu Property's total land reserves were about 25.03 million square meters, with 94% distributed in first-tier cities and key second-tier cities.

The management of Yuexiu Property stated: "In our investment strategy, we adhere to the principle of production based on sales, focusing more on the core areas of core cities, continuously delving deeper, and focusing on the four first-tier cities of Beijing, Shanghai, Guangzhou, and Shenzhen, as well as key second-tier provincial capital cities. In terms of investment projects, we prioritize benefits, focusing on projects with high certainty of returns and quick economic cash flow."

An important reason why Yuexiu Property can continue to stockpile ammunition is its robust financial condition.

By the end of the first half of the year, the total amount of cash, cash equivalents, and deposits under surveillance accounts of Yuexiu Property was about 48.14 billion yuan. The asset-liability ratio excluding advance receipts, net borrowing ratio, and cash-to-short-term debt ratio were 68.3%, 58.6%, and 1.53 times, respectively, maintaining the "green band" standard for the "three red lines" indicators.

At the same time, Yuexiu Property's average financing cost has further decreased year-on-year. The weighted average borrowing interest rate for the first half of the year decreased by 41 basis points year-on-year to 3.57%, and the average borrowing cost at the end of the period further decreased to 3.47%.It is reported that in July, Yuexiu Property also successfully issued corporate bonds totaling RMB 1.5 billion within the territory, including a 5 billion 3+2 year term with a coupon rate of 2.25%, and a 10 billion 10-year term with a coupon rate of 2.75%. There should be further room for the financing rate to decrease throughout the year.

Regarding the upcoming market trends, Yuexiu Property Chairman Lin Zhaoyuan stated: "The new housing market is still in the process of seeking balance. In the future, good products and services will be the mainstream of the market. The higher the urban level, the greater the market opportunities. Overall, as a pillar industry, the real estate market is worth looking forward to, with the overall market size maintaining a scale of 8 trillion to 10 trillion yuan."