The total loss exceeds 12 billion yuan, with over 50% of A-share real estate companies experiencing pre loss sales prices in the first half of the year | Enterprise | A-share
In the first half of the year when the recovery in the real estate industry was not significant, more than half of A-share real estate companies were expected to incur losses.
As of August 4th, among the 116 A-share real estate companies classified by Wind industry, 68 have disclosed their performance forecasts for the first half of the year. Among them, 38 real estate companies are expected to incur losses, which means that more than half of the real estate companies that have disclosed their performance forecasts are expected to incur losses. In addition, according to statistics from First Financial, the total losses of the 38 real estate companies mentioned above range from 12 billion yuan to 17 billion yuan.
The real estate company with the largest pre loss amount is Shoukai Group, with a net profit pre loss range of 1.7-22 billion yuan, followed by Jinke Group and ST Sunshine City, both of which have a maximum pre loss amount of over 2 billion yuan. In addition, both OCT A and Huaxia Happiness have a pre loss amount exceeding 1 billion yuan; Financial Street, CCCC Real Estate, Zhongnan Construction, Huayuan Real Estate, Nanguo Real Estate, Everbright Jiabao, Gree Real Estate, ST Shimao, Tianfang Development, and Wuyi, China all achieved a loss of billions of yuan.
Some A-share real estate companies have a range of pre loss for the first half of 2023/data sourced from Wind
The reasons for the losses of real estate companies include a decrease in housing delivery and a decrease in revenue; Selling at reduced prices, resulting in a decrease in gross profit margin; An increase in financial expenses; The decline in asset value, etc.
For example, Huaxia Happiness stated that in the first half of 2023, there was a delay in the progress of some of the company's real estate projects, and the completion and delivery progress of the projects were also affected to a certain extent, resulting in a decrease in the recognition amount of real estate business revenue.
China Communications Real Estate also stated that during the reporting period, due to different delivery schedules for the company's real estate development business, the number of projects that met delivery conditions in this period decreased compared to the same period last year. In addition, due to the impact of the market environment, there are signs of impairment in some of the company's real estate development projects, and it is expected that the provision for asset impairment will increase year-on-year during the reporting period.
OCT stated that due to factors such as the real estate market environment and changes in the company's project transfer structure, the gross profit margin of the company's transfer projects has decreased year-on-year; In order to adapt to the market environment and accelerate sales, the company has adopted flexible sales strategies for some real estate projects, which are expected to bring some value loss.
Financial Street also stated that the real estate industry is facing a severe situation, and the company has adopted various sales strategies, including adjusting sales prices, to actively promote project sales. Although the company's sales contract amount increased by more than 30% year-on-year in the first half of the year, and the sales revenue increased by about 60% year-on-year, the gross profit margin of some projects of the company has declined, and some projects have incurred losses due to adjusting sales prices.
ST Sunshine City stated that the operating loss for this year was mainly due to the extension of project development cycles and an increase in expensed loan interest.
It is worth noting that in the first half of this year, there were also real estate companies expected to turn losses into profits, including Yunnan Chengtou, Shensaige, Rongsheng Development, Hainan Expressway, WorldLink, Hualian Holdings, and Nanshan Holdings. However, upon reviewing relevant announcements, it was found that only Rongsheng Development and Nanshan Holdings have turned losses into profits due to the improvement of real estate business operations. Almost all other real estate companies that have turned losses into profits involve non operating income and investment income.
In the first half of this year, there was no significant improvement in China's real estate sales market. Previously, data from the National Bureau of Statistics showed that in the first half of this year, the sales area of commercial housing in China was 595.15 million square meters, a year-on-year decrease of 5.3%, with residential sales area decreasing by 2.8%. The sales revenue of commercial housing reached 630.92 billion yuan, an increase of 1.1%, with residential sales increasing by 3.7%.
Entering July, the sales scale of real estate companies has declined. According to data from Ke Er Rui, the performance scale of the top 100 real estate enterprises in July this year hit a new low in recent years, with monthly performance declining both month on month and month on month, with a month on month decrease of 33.5% and a year-on-year decrease of 33.1%. Accumulated performance decreased by 4.7% year-on-year, and performance growth rate changed from positive to negative. In July, nearly 70% of the top 100 real estate companies saw a month on month decrease in performance, with 36 companies experiencing a year-on-year decrease of over 50%.
According to a research report by Kerui, overall, the confidence in the real estate industry is still at a low level. In July, supply and demand were weak, the recovery momentum of the real estate market slowed down, and there is still significant pressure for companies to go bankrupt. However, it is worth noting that the central government frequently expressed positive signals in late July. If core first and second tier cities can steadily implement local loosening policies, the overall scale of new housing transactions is expected to stop falling and stabilize.
