Midea Real Estate Holding Full Year 2023 Earnings: Revenues Beat Expectations, EPS Lags

Midea Real Estate Holding (HKG:3990) Full Year 2023 Results

Key Financial Results

• Revenue: CN¥73.6b (flat on FY 2022).
• Net income: CN¥913.6m (down 47% from FY 2022).
• Profit margin: 1.2% (down from 2.3% in FY 2022).
• EPS: CN¥0.66 (down from CN¥1.34 in FY 2022).

All figures shown in the chart above are for the trailing 12 month (TTM) period

Midea Real Estate Holding Revenues Beat Expectations, EPS Falls Short

Revenue exceeded analyst estimates by 2.0%. Earnings per share (EPS) missed analyst estimates by 46%.

The primary driver behind last 12 months revenue was the Property Development and Sales segment contributing a total revenue of CN¥71.7b (97% of total revenue). Notably, cost of sales worth CN¥65.1b amounted to 88% of total revenue thereby underscoring the impact on earnings. The most substantial expense, totaling CN¥4.11b were related to Non-Operating costs. This indicates that a significant portion of the company's costs is related to non-core activities. Explore how 3990's revenue and expenses shape its earnings.

Looking ahead, revenue is expected to decline by 14% p.a. on average during the next 3 years, while revenues in the Real Estate industry in Hong Kong are expected to grow by 5.2%.

Performance of the Hong Kong Real Estate industry.

The company's shares are up 12% from a week ago.

Risk Analysis

It's necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with Midea Real Estate Holding (at least 1 which is significant), and understanding them should be part of your investment process.

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