Exchange: HKSE | Sector: Real Estate | Industry: Real Estate Services
Q3 2024
Published: Sep 30, 2024
Earnings Highlights
Revenue of $3.42B down 11.6% year-over-year
EPS of $-0.58 decreased by 346.2% from previous year
Gross margin of 13.0%
Net income of -818.26M
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ALiving Smart City Services Co Ltd (3319.HK) QQ3 2024 Results – Real Estate Services: Revenue Decline, Margin Pressure and Steady Liquidity Position
Executive Summary
ALiving Smart City Services reported QQ3 2024 revenue of 3,422,306,500 CNY, down 11.62% year over year (YoY) and 2.53% quarter over quarter (QoQ), with gross profit of 445,374,000 CNY and a gross margin of 13.01%. The quarter showed notable margin compression as operating income declined to -726,154,500 CNY and EBITDA came in at -1,858,389,000 CNY, resulting in a net loss of -818,264,500 CNY and basic earnings per share (EPS) of -0.58. The results reflect a challenging environment for the company’s core property management and related services, combined with a sizable other expense line of 934,332,000 CNY that weighed on profitability. YoY earnings deterioration is pronounced, with net income down 332.86% YoY, while QoQ progression remained largely negative on the bottom line (net income QoQ -0.14%).
No earnings call transcript highlights are available for QQ3 2024. The transcript data field is currently empty, and management commentary from the QQ3 2024 call could not be sourced from the provided dataset.
Not available in QQ3 2024 transcript data.
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Not available in QQ3 2024 transcript data.
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Forward Guidance
No formal forward guidance is provided in the QQ3 2024 release within the supplied data. Management commentary on future targets or guidance is not present. Investors should monitor ongoing revenue stabilization in China’s real estate services market, potential margin improvement through cost control (particularly in other expenses) and the progression of non-property management initiatives (e.g., home improvement, advertising, tourism services, and smart city offerings) as potential catalysts for earnings progression.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
3319.HK Focus
13.01%
-21.20%
-8.70%
-1.36%
6098.HK
16.30%
-3.20%
-2.85%
-6.13%
6989.HK
16.40%
7.72%
1.85%
8.68%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
ALiving’s QQ3 2024 results reflect a transition phase where liquidity remains robust, but profitability has yet to normalize. The company posted positive operating cash flow (403,090,000 CNY) and free cash flow (374,850,499 CNY) despite a negative bottom line, highlighting an ability to fund ongoing operations and potential strategic investments. The key questions for investors are whether management can stabilize or grow revenue in a cautiously improving Chinese property market, and whether cost controls can meaningfully reduce the sizable other expenses that weighed on margins. If non-property management initiatives and smart city deployments scale meaningfully and operating costs are controlled, there is potential for a multi-year earnings inflection. In the near term, the stock carries elevated profitability risk versus peers, though the balance sheet remains favorable with low leverage and ample liquidity compared with peers operating in similar segments.
Key Investment Factors
Growth Potential
Diversified service mix including property management, extended value-added services, non-property management activities (pre-delivery services, household services, property agency and housing inspection), and smart city initiatives. Potential upside from scalable non-core services (advertising, tourism, IT consulting, community renewal) and continued expansion of software/tech-enabled property solutions.
Profitability Risk
China real estate cycle risk and material dependence on property management demand; elevated other expenses and ongoing margin pressure; regulatory and macro headwinds for the sector; currency/FX not a primary risk in CNY but external factors could influence working capital and receivables; competitive intensity in diversified service offerings.
Financial Position
Robust liquidity with cash and cash equivalents of 3,315,850,000 CNY and total liquidity around 5,309,508,000 CNY. Negative net debt of approximately 2.809 billion CNY indicates substantial cushion relative to debt obligations. Solid current ratio (1.51) and quick ratio (1.506) suggest healthy short-term liquidity despite profitability pressures.
SWOT Analysis
Strengths
Strong liquidity position with cash and cash equivalents of 3,315,850,000 CNY and net debt of -2,809,127,000 CNY
Healthy working capital with current ratio 1.510 and quick ratio 1.506
Diversified service mix spanning property management, extended value-added services, non-property management services, and smart city initiatives
Solid asset base and equity position (Total equity ~9.411B CNY) supporting ongoing investments
Weaknesses
Material net loss and negative EBITDA (EBITDA -1,858,389,000 CNY; Operating income -726,154,500 CNY)