Key Takeaways:
- Yuexiu Property expects H1 net profit of RMB 50-100 million, down 90-95% YoY.
- Core net profit also seen falling 90-95% to RMB 50-100 million.
- The warning raises questions about dividend sustainability for the developer.
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Yuexiu Property warns net profit to plunge as much as 95% in first half
Yuexiu Property expects H1 net profit of RMB 50 million to RMB 100 million, a decline of as much as 95% from a year earlier.
"The group expects to record a significant decline in net profit for the six months ended 30 June 2026," the company said in a Hong Kong stock exchange filing, citing lower revenue recognition and asset impairment charges.
Core net profit — which excludes revaluation and investment property fair value changes — is also expected to fall 90-95% YoY to RMB 50-100 million, the filing shows. The company did not disclose revenue or contracted sales figures for the period. Yuexiu had reported interim net profit of about RMB 1 billion in the first half of 2025.
The profit warning adds to mounting distress in China's property sector, where even state-backed developers are struggling with weak demand and persistently falling home prices. Yuexiu Property, controlled by Guangzhou state-owned enterprise Yuexiu Group, had been one of the few Chinese developers that continued to pay dividends. It paid an interim dividend of HKD 0.166 per share in August 2025, down from HKD 0.189 a year earlier, and skipped a final dividend for the full year ended December 2025.
The warning comes despite recent signs of stabilization in China's Tier 1 cities, where CLSA has said it sees home prices firming. The brokerage has favored Yuexiu Property alongside China Resources Land and China Jinmao. Still, the magnitude of the profit decline suggests the recovery has yet to reach the bottom line for most builders.
Short selling data as of July 17 showed 30.9% of turnover was short sales, amounting to HK$4.67 million, indicating some investors are positioning for further downside. The stock had gained 0.8% in the session before the warning was issued.
The profit warning is the latest in a series from Chinese developers as the property downturn extends. Unlike many peers that have defaulted on debt, Yuexiu has maintained access to funding through its state-owned parent.
Investors will watch for the company's full interim results, due by the end of August, for details on its cash position and debt maturity profile. The warning raises questions about whether Yuexiu can maintain its dividend policy amid the prolonged downturn, with the interim dividend already cut 12% year-on-year in 2025.
This article is for informational purposes only and does not constitute investment advice.
