Stock Track | Midea Real Estate Plummets 5.71% Intraday as Gross Margin Compression Offsets Profit Growth

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Midea Real Estate Holding's stock fell sharply by 5.71% during intraday trading on Wednesday, despite the company reporting growth in annual profit and revenue.

The decline came after the company released its full-year financial results, which showed profit attributable to owners rose 16.9% to RMB 559 million and revenue increased 11.4% to RMB 4.1 billion. However, investors focused on the significant compression in profitability, with the gross profit margin narrowing by 2.8 percentage points to 32.9%.

While the company's project management services revenue more than tripled to RMB 958 million following a 2024 restructuring, and a final dividend of HK$0.19 per share was recommended, the market reaction was negative due to concerns over declining margins overshadowing the top-line growth.

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