(Yicai) March 25 -- Shares of Gemdale stabilized after the leading Chinese real estate developer released its first annual report following a peak debt period, reducing its liabilities by around CNY20 billion (USD2.8 billion) last year.

Gemdale [SHA: 600383] rose 0.4 percent to CNY4.56 (US 60 cents) in Shanghai today after falling 3 percent yesterday.

The company’s interest-bearing debt balance had dropped by 20 percent year-over-year to CNY73.5 billion as of Dec. 31, 2024, with more than 96 percent consisting of bank loans, according to the Shenzhen-based home builder's annual report released yesterday. The weighted average cost of debt financing fell to 4.05 percent, down 31 basis points from 2023.

Gemdale’s asset-liability ratio stood at 64.8 percent. After deducting contract liabilities, the ratio declined to 59.7 percent from the previous year's 61.3 percent. The net debt ratio, which measures net debt relative to equity, remained stable at 49.1 percent.

Shrinking Earnings

Despite an improving balance sheet, Gemdale’s income statement remained weak, as the slow recovery in China’s real estate industry failed to drive sales.

Annual revenue fell 23 percent year-on-year to CNY75.3 billion, while net loss surged nearly sixfold to CNY6.1 billion (USD843 million).

The company delivered fewer projects to buyers last year, with its settlement area totaling nearly four million square meters, a 21 percent decline. Corresponding revenue dropped 30 percent to CNY60 billion. The gross profit margin of Gemdale’s real estate business fell to 14.11 percent from 16.16 percent.

As of December, Gemdale’s total land reserves stood at 26.2 million square meters, with around 43 percent classified as equity reserves, indicating full ownership. Nearly four-fifths of these plots are located in first- and second-tier cities.

With its financial position gradually improving, Gemdale resumed land acquisitions early this year, successfully bidding for residential development rights in Hangzhou and Shanghai.

Looking ahead, the company said it will adhere to a strategy of safety and prudence, seizing opportunities to invest in land based on market conditions and available resources. It also plans to reasonably schedule new construction and project completions.

Editors: Tang Shihua, Emmi Laine