Sunrise Real Estate Group Reports 34% Revenue Growth in Q3 2024, Net Income Turnaround

Sunrise Real Estate Group, Inc. (SRRE) reported its financial results for the three and nine months ended September 30, 2024, highlighting significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the third quarter of 2024, SRRE achieved net revenues of $7.2 million, a 34% increase from $5.4 million in the same period of 2023. This growth was primarily driven by the real estate development segment, which accounted for approximately 96% of total revenues. Gross profit for the quarter rose to $1.5 million, up from $741,481 year-over-year. Operating profit also improved significantly, reaching $749,180 compared to an operating loss of $482,702 in Q3 2023. The company reported net income of $3.3 million for the quarter, a substantial turnaround from a net loss of $1.2 million in the prior year.

However, for the nine months ended September 30, 2024, SRRE reported net revenues of $13.6 million, a decrease of 25% from $18.2 million in the same period of 2023. The decline was attributed to fewer units being handed over for the Huai’an Tianxi project in the first half of 2024. Gross profit for the nine-month period was $2.2 million, down from $2.4 million in 2023, while the net loss widened to $5.8 million from a loss of $2.9 million in the previous year.

Total assets decreased to $195.8 million as of September 30, 2024, from $207.9 million at the end of 2023. Current liabilities also fell to $83.8 million, down from $91.7 million, contributing to a reduction in total shareholders' equity to $112.1 million from $116.2 million. Retained earnings showed a deficit of $4.4 million as of September 30, 2024, compared to $99.2 million at the end of 2023.

Strategically, the company continues to focus on its real estate development projects, with significant investments in properties under development. The Linyi project, for instance, has seen substantial progress, with multiple phases completed and sold. Additionally, SRRE has plans to raise additional funds through equity securities or credit facilities to support its growth initiatives.

The company also identified a material weakness in its accounting department related to U.S. GAAP compliance, prompting remediation efforts, including hiring qualified personnel and providing ongoing training. Despite these challenges, management believes that the financial statements fairly present the company's financial condition and results of operations.