Longfor Group Posts Profit Fall, Rise in Revenue From Investment Property Operations

By Jiahui Huang

Longfor Group's net profit and revenue both fell during the first half of the year, but it managed to generate growth in revenue from investment property operations despite the continued slump in China's real-estate market.

The Chinese property developer's net profit dropped 27% to 5.87 billion yuan during the half compared with a year earlier, equivalent to $821.5 million. Its revenue fell to 46.86 billion yuan from 62.04 billon yuan on the year.

Revenue at Longfor's core property development business fell 32% to 33.76 billion yuan, with its gross profit margin at 7.4%.

While the company's property development and services revenue dropped on the year during the six-month period, revenue from its investment property operations segment, which mainly involves shopping malls and rental housing services, rose 4.3% to 6.61 billion yuan.

Longfor is one of the few Chinese develops that has been increasing its profit from asset management and investment properties instead of home-building, as the country's property sector remains mired in a years-long downturn.

Looking ahead, the company said it will focus on reducing inventory at its property development business. In commercial investment, it aims to launch about 10 shopping malls in key Chinese cities this year.

The company's shares were last down 0.8% by midday Friday in Hong Kong and are down 32% so far this year.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

August 23, 2024 01:12 ET (05:12 GMT)

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