Wednesday, real estate services company E-House China Holdings Ltd. (EJ) reported an sharp rise in second-quarter profit, backed by a 48% increase in quarterly revenues, reflecting the "recovery" of the Chinese real estate industry. The company also provided a revenue guidance for the third quarter.
The Shanghai, China based company reported second-quarter net income attributable to shareholders of $19.35 million or $0.24 per ADS, up from $11.75 million or $0.14 per ADS in the same quarter last year.
On a non-GAAP basis, net income excluding share-based compensation expenses increased to $21.39 million or $0.27 per ADS from $12.73 million or $0.15 per ADS in the year ago quarter.
On average, three analysts polled by Thomson Reuters expected the company to earn $0.17 per ADS for the quarter. Analysts' estimates typically exclude special items.
Income from operations for the quarter was $24.0 million, up 40% from $17.2 million in the same quarter prior year. Income from operations excluding share-based compensation expenses increased 43% to $26.1 million from $18.2 million in the prior year quarter.
The company also attributed the increase in quarterly net income to a decrease in interest expense, as it repaid all outstanding bank loans. As a result, the company did not report any interest expense for the quarter, compared to $0.89 million in the year-ago quarter. Results for the quarter also benefited from a lower effective tax rate due to the preferential tax rate applied to one of the company's subsidiaries in the real estate consulting and information services segment.
Total revenues for the quarter were $63.5 million, up 48% from $43.0 million in the comparable quarter last year. Analysts expected the company to report revenues of $50.67 million for the quarter.
Commenting on the results, Xin Zhou, E-House's chairman and chief executive officer said, "As real estate transaction volume staged an impressive rebound across the country since the start of the spring, we have continued to outperform the market with strong growth in both primary agency and secondary brokerage segments. Moreover, our information and consulting segment continues its solid growth, and our new advertising segment has started to make meaningful contributions to our revenues."
For the six-month period, E-House reported net income attributable to shareholders of $26.41 million or $0.33 per ADS, compared to $20.42 million or $0.25 per ADS in the year ago period. On a non-GAAP basis, net income was $30.15 million or $0.38 per ADS, up from $22.16 million or $0.27 per ADS in the prior year period.
Total revenues were $96.29 million, up 26% from $76.20 million in the same period a year ago.
Looking ahead to the third quarter, the company estimates revenues to be in the range of $78 million - $80 million. Analysts currently anticipate the company to report revenues of $52.66 million for the third quarter.
EJ closed Tuesday's trading at $20.06, on a volume of 2,030 share on the NYSE.
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