HK Stock Market Move | GREENTOWN CHINA (03900) rises more than 3%, institutions are optimistic about the company's profit recovery after completing the transfer of low-margin projects.

Greentown China (03900) rose more than 3%, as of the time of publication, it rose by 2.72% to 9.06 Hong Kong dollars, with a turnover of 20.7144 million Hong Kong dollars. Open Source Securities released a research report stating that Greentown China issued a profit warning on February 3, 2025, expecting the company's net profit attributable to shareholders to decrease by no more than 50% year-on-year in 2024, not less than 15.59 billion yuan. The main reason is that, against the background of a downturn in the real estate market, the company actively increased efforts to clear long inventory, accelerated inventory structure adjustment, leading to an increase in asset impairment losses provision in 2024. Excluding impairment factors, the net profit attributable to shareholders is expected to increase year-on-year. The bank stated that Greentown China's sales remain stable, land acquisition intensity remains high, and self-development and construction business proceed smoothly, with ample land reserves and high-quality structure. Affected by the downturn in the real estate industry sales, the companys asset impairment losses increased, leading to a downward revision of profit forecasts. It is expected that the net profit attributable to shareholders of the company in 2024-2026 will be 24.72, 33.25, and 45.41 billion yuan (previously 36.54, 43.97, and 50.70 billion yuan). The bank is optimistic about the companys profit recovery after the completion of low-margin projects.