The latest: Property manager and agent E-House (China) Enterprises Holdings Ltd. (2048.HK) issued a profit warning on Monday morning saying it expected to report a loss of 9.2 billion yuan ($1.45 billion) to 9.6 billion yuan for 2021, reversing a profit of 439 million yuan for 2020.

Looking up: E-House’s acquisition of internet-based property marketing platform Leju Group in November 2020 gave it an additional 1.95 billion yuan in marketing revenue in the first half of last year, accounting for approximately 31% of the company’s turnover. That business is expected to make a significant contribution to its revenue growth last year.

Take Note: The company recorded a loss of 1.42 billion yuan in the first half of last year. That means that using the full-year estimated loss of 9.2 billion yuan to 9.6 billion yuan, the company’s loss widened to up to 8.18 billion yuan in the second half of last year.

Digging Deeper: As a major real estate agent and property manager offering a range of services, E-House was an early market leader that was originally listed in the U.S., then delisted in 2016, and re-listed in Hong Kong in July 2018. Its business was hit in 2020 by the pandemic that forced the closure of many of its brick-and-mortar sales offices, leading to a plunge in transactions that resulted in a 62.3% drop in its profit that year. It continued to suffer last year under government policies designed to cool speculative investment in residential properties. The company’s bottom line is also taking a hit from additional loss allowances related to its growing inability to collect payments from certain property developers whose credit quality has worsened.

Market Reaction: E-House shares plunged 29.6% to a record low in early trading on Monday, before paring those loses to close down 13.9% at HK$0.99 at the midday break. The stock has lost 90% of its value from its one-year high of HK$9.69 reached last May.

Translation by Jony Ho

To subscribe to Bamboo Works free weekly newsletter, click here

Recent Articles

BridgeHR files for Hong Kong IPO

BridgeHR rides gig economy to Hong Kong IPO

China’s largest supplier of temporary employees is hoping to tempt investors with ‘its gig economy’ story, even as it relies heavily on one major customer Key Takeways: BridgeHR has filed…