Core views
In the first half of 2023, the company achieved revenue of 24.4 billion yuan, a year-on-year increase of 43.7%, a year-on-year net profit of 1.28 billion yuan, a year-on-year increase of 52.5%, and achieved rapid growth in performance. The gross settlement margin was 15.2% during the reporting period, an increase of 0.1 percentage points over the same period last year, and profitability remained stable. In the first half of 2023, the company achieved sales of 94.1 billion yuan, an increase of 43.4% over the previous year, ranking 9th among the top 100 real estate enterprises, up 7 places from the same period last year, and the company's sales recovered markedly. The company obtained 46 projects in 25 cities. The land acquisition amount was 68.4 billion yuan, an increase of 23.9% over the previous year, and the land acquisition intensity was 72.7%. As of the end of June 2023, the company had land reserves of 17.11 million square meters, with a value of 278.8 billion yuan, of which 74% were located in Tier 1 and 2 cities, and the proportion of new land acquired after 2022 was as high as 60%, and the quality of land storage was excellent.
occurrences
The company announced its 2023 interim results announcement, achieving revenue of 24.4 billion yuan, an increase of 43.7% over the previous year, and net profit of 1.28 billion yuan, an increase of 52.5% over the previous year.
Brief review
The company's performance has achieved rapid growth, and its profitability has remained stable. In the first half of 2023, the company achieved revenue of 24.4 billion yuan, a year-on-year increase of 43.7%, a year-on-year net profit of 1.28 billion yuan, a year-on-year increase of 52.5%, and achieved rapid growth in performance. The growth rate of net profit from returning to the mother is higher than the revenue growth rate mainly due to the decline in minority shareholders' share of profit and loss. In the first half of 2023, minority shareholders accounted for 9.7% of profit and loss, down 24.5 percentage points from the previous year. The gross settlement margin was 15.2% during the reporting period, an increase of 0.1 percentage points over the same period last year, and profitability remained stable.
Sales have recovered markedly and continued to be deeply developed in core cities. In the first half of 2023, the company achieved sales of 94.1 billion yuan, an increase of 43.4% over the previous year, ranking 9th among the top 100 real estate enterprises, up 7 places from the same period last year, and the company's sales recovered markedly. The company continues to cultivate in the cities where it is located. In the first half of the year, 38 cities entered the top 10 sales, and 18 of them ranked first. In the first half of the year, the company achieved sales amounts of 62.4 billion yuan in the top 10 sales cities, accounting for 66%. Among them, sales amounts of 12.9 billion yuan and 113 billion yuan were achieved in Shanghai and Xiamen respectively, breaking 10 billion yuan in half a year, highlighting the advantages of deepening cultivation.
Focus on core cities to actively acquire land, with abundant land reserves. In the first half of 2023, the company obtained 46 projects in 25 cities. The amount of land acquired was 68.4 billion yuan, an increase of 23.9% over the previous year, 5.38 million square meters of land, an increase of 49.0% over the previous year, and the land acquisition intensity was 72.7%, down 11.5 percentage points from the same period last year. The company continues to cultivate in core cities. The total land acquisition amount for the top 10 land acquisition cities was 51.9 billion yuan, accounting for 76%, of which Hangzhou and Shanghai acquired 15.5 billion yuan and 11 billion yuan of land respectively. By the end of June 2023, the company had land reserves of 17.11 million square meters, with a value of 278.8 billion yuan, of which 74% were located in Tier 1 and 2 cities, and the proportion of new land acquired after 2022 was as high as 60%. The quality of land storage was excellent, which strongly guarantees continued growth in future sales.
Keep profit forecasts and buying ratings unchanged. We forecast the company's EPS for 2023-2025 to be 3.76/4.77/5.79 yuan. As a leading local state-owned enterprise, the company remains strong in sales and land acquisition and will stand out from changes in the industry pattern. It is expected that future performance will continue to increase, keeping the purchase rating and target price unchanged at HK$36.88.
Risk warning: 1. In terms of sales, the market is currently in a stage of weak recovery, and the degree of recovery in some cities is weak. The company maintained a high level of land acquisition intensity in the early stages. If the urban layout and recovery of Chengdu falls short of expectations, it is likely that the expected price at the time of land acquisition cannot be achieved, thus further affecting subsequent performance. 2. In terms of layout, the company's land acquisition layout is concentrated in the Haixi region, especially in Fujian Province. Although as the company's base, the company has a local advantage with its high-quality products and brand recognition, relying too much on the single market will make it impossible for risks to be scattered. In the future, we need to continue to pay attention to the Fujian market situation. 3. In terms of carry-over, the company currently has plenty of carry-over resources, but project progress is uneven. If delivery is delayed in some cities, it may cause the company's carry-over to fall short of expectations, which in turn affects the realization of the company's revenue and profit.