HONG KONG, Aug 27, 2024 - (ACN Newswire) - Everbright Grand China Assets Limited ("Everbright Grand China" or the "Group"; HKEX stock code: 03699.HK), a subsidiary of China Everbright Group, principally engaged in the businesses of property leasing, property management and the sales of properties held for sale, announced its interim results for the six months ended 30 June 2024 ("Reporting Period").
During the Reporting Period, the Group's revenue amounted to approximately RMB23.9 million, representing an increase of approximately RMB1.8 million as compared to the same period of last year (2023: RMB22.1 million). The increase in revenue was mainly attributable to the increase in revenue from management services. Profit attributable to equity shareholders of the Company amounted to approximately RMB11.4 million (2023: RMB13.3 million), representing a decrease of approximately RMB1.9 million as compared to the same period of last year, which was attributable to the decrease in valuation gains on investment properties. Basic earnings per share was approximately RMB0.03 (2023: RMB0.03). Considering that the current operating environment remains relatively challenging, the Board declared an interim dividend of RMB0.78 cents (equivalent to HK$0.85 cents) (2023: RMB1.06 cents (equivalent to HK$1.16 cents)) per ordinary share for the six months ended 30 June 2024 as a token of appreciation to shareholders for their continuous support. In the second half of the year, the Company will decide on dividend distribution taking into account factors such as business development needs, financial performance and capital position, as well as performance growth, in order to bring the best return to the Company's shareholders and investors.
In 2024, following two consecutive years of slowdown, the global economy is in the process of returning to a "normal" state, although growth remains relatively subdued with weakening momentum. Challenges such as interest rate hikes in Europe and the United States, decreasing inflation, and geopolitical risks have added uncertainties to the outlook for recovery. Despite this, the Chinese economy began the year positively in the first half of 2024. While growth momentum has softened, economic operations have remained relatively stable, showing signs of gradual improvement. The Group primarily manages commercial properties and has been attentively monitoring market developments and actively deploying strategies to carefully assess market conditions, adjust rental rates reasonably and seize opportunities to develop new tenants.
Property Leasing
The continued recovery in consumer spending is set to become the core driver of economic growth in China in 2024, boosting demand for leasing in the commercial property sector. During the Reporting Period, rental income amounted to approximately RMB16.3 million (2023: RMB16.2 million), representing an increase of approximately RMB0.1 million as compared to the same period of last year. During the period, the average occupancy rate of the properties was approximately 77% (2023: 73%).
Property Management Service
Following unprecedented economic challenges, the development strategy of property management enterprises has undergone a significant transformation. Their strategic direction has become more prudent, shifting away from blind pursuit of scale expansion. The Group emphasizes the refinement and enhancement of service quality while adopting a "stabilize before expand" approach, aiming to maintain stable cash flow and business growth. During the Reporting Period, revenue from property management services amounted to approximately RMB7.6 million (2023: RMB5.9 million), representing an increase of approximately RMB1.7 million as compared to the same period of last year, which was mainly attributable to the increase in revenue from value-added management services.
Investment Properties
As at 30 June 2024, the fair value of investment properties amounted to RMB962.3 million (31 December 2023: RMB959.5 million). The valuation gain on investment properties for the six months ended 30 June 2024 amounted to RMB1.0 million (2023: RMB5.4 million), representing a decrease of approximately RMB4.4 million as compared to the same period of last year.
As at 30 June 2024, the Group held cash and bank balances of approximately RMB223.3 million (31 December 2023: RMB222.2 million). The Group's gearing ratio (measured as the Group's total liabilities divided by total assets) was 18.1% (31 December 2023: 18.6%) with a solid liquidity position.
In the first half of 2024, the Group's tenant and leasing contracts and occupancy rates continued to remain stable. Meanwhile, the Group maintained a healthy financial position with zero debt and strong cash flow during the period under review. In light of the promising domestic and international environment, the Group will continue to focus on property investment in the future, and prudently identify suitable new investment projects with potential for long-term returns.
Prospects
As innovation in the digital economy continues to progress, China is actively driving its digital transformation. Property management companies are undergoing hardware upgrades and software enhancements to leverage intelligent technologies for operations simulation, optimized staffing, and the proactive advancement of industrial transformation. These enterprises have successfully implemented digital operations across various scenarios. With the ongoing evolution of technologies like artificial intelligence, it is anticipated that property management companies will soon experience the practical application of these advanced technologies, potentially elevating their service quality and management capabilities to new levels.
Looking forward, the Group intends to uphold a prudent business strategy, emphasizing quality and steady progress. In additon, it will actively align with national policies, carry out effective initiatives to maintain market value, prioritize risk management and internal controls, and strive to generate long-term and sustainable value for shareholders. By actively adapting to national policies and industry shifts, the Group aims to expand its brand influence within the property management sector, ultimately creating greater societal value.
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