Guangzhou-based developer R&F Properties announced its 1H2021 results on Tuesday where it reported an 18% YoY increase in total revenue to CNY 39.49bn ($6.1bn) boosted by revenue from its property development business, which increased 17% to CNY 35.95bn ($5.55bn). The contracted sales for 1H came in at CNY 65.08bn ($10.05bn), up 18% YoY. The higher proportion of sales in tier-1 and tier-2 cities included Guangzhou, Hainan, Xi’an and Beijing. While the company saw an increase in its top line, it witnessed a fall in its bottom line as its net profits dropped 15% YoY to CNY 2.96bn ($460mn).

The long-term borrowings were lower by 4.6% at CNY 91.44bn ($14.1bn) as of June 30, 2021 vs. CNY 95.85bn ($14.8bn) on June 30, 2020. The short-term borrowings and the current portion of long-term borrowings were down 17% to CNY 51.9bn ($8bn) vs. CNY 62.88bn ($9.7bn) last year. The restricted cash of the company rose to CNY 16.04bn ($2.48bn) in the first half vs. CNY14.28bn ($2.2bn) last year and its cash and cash equivalents dropped to CNY 12.76bn ($1.97bn) from CNY 25.67bn ($3.96bn), a drop of ~50%. Overall gross margin for the period was 22.3% compared to 33.5% in the same period in 2020. The decrease was due to the adjustments made on average selling price to accelerate the pace of sales. On the forward guidance, the property developer said, “Delivering on higher contracted sales and potential asset sales will be important to achieving a deleveraging target for 2021. With an estimated over RMB270 billion ($41.7bn) of saleable resources and nationwide launch pipeline, management continues to implement on a sales plan outlined at the beginning of the year.”

The bonds of the company have been trending lower with it’s 5.875% 2023s and 8.625% 2024s down 0.94 and  0.83 to trade at 77.19 and 72.63 cents on the dollar on the secondary markets. This comes after the bonds were trading ~5 points higher last week at 83.42 and 78.85 on August 17.

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