Year-on-year net profit was-163.4%, downgraded to the medium report released by the "overweight" rating company on August 30, 2023H1 achieved revenue of 5.61 billion yuan,-47.1% year-on-year; return-730 million yuan, year-on-year-163.4%. Due to losses in the real estate sector, we estimate that the EPS for 2023-2025 will be-0.21max 0.29max 0.34RMB (before 2023-2024RMB 0.61 0.67 yuan), and the average 2024PE of a comparable company will be 16.1 times (Wind consensus expectation). We think that the company is rich in land reserves and has sales flexibility. 22 years of major shareholders to help the company invigorate assets also reflect the group's support to the company, we think that the company's reasonable PE in 2024 is 18 times. The target price is 5.22 yuan (the previous value is 7.28 yuan), downgraded to "overweight" rating.
The development business performance is under pressure, and the diversified business is making progress steadily.
The carry-over income of the company's 23H1 development business was 4.44 billion yuan, down 53.9% from the same period last year, and the gross profit margin was-1.8%, down 17.0% from the same period last year. During the downward period of the market, the company adopted a variety of sales strategies, including adjusting the sales price, to promote the elimination of sales, resulting in pressure on gross profit margin, which is also the main reason for the net loss. Revenue from the company's 23H1 leasing business / operating business rose 10.1% to 77.6% from the same period last year, with a gross profit margin of 89.4% and 13.1%, respectively, up 1.3% from a year earlier. Mainly due to the company's adjustment and optimization of business writing plate investment strategy, the level of rental rate has increased; at the same time, seize the opportunity of the warming of the tourism travel market to expand the source of tourists, scenic passenger flow and project operating income growth.
Sales increase compared with the same period last year, and the value of goods is abundant waiting to recover.
As a result of the company's price for quantity and rapid elimination, the sales scale of 23H1 has increased significantly, and the sales amount / area has increased by 35% and 44% compared with the same period last year. At the same time, the company's sales structure has been continuously optimized. The proportion of sales in Beijing-Tianjin-Hebei / Yangtze River Delta / Greater Bay area is 58% and 23% respectively, up 2.4% and 5.1% respectively over 22H1. Although there is no new land for 23H1, the company still has plenty of land reserves. As of 23H1, the company has a layout of 16 key cities, with a total construction area of about 1428 million square meters, which can be developed for 10 years based on the estimated sales area of 22 years. Structurally, the proportion of first-tier and second-tier cities is 24% and 29% respectively, so we believe that when the fundamentals of the industry enter the repair period, the company has scale flexibility.
The financing advantage is highlighted, and the operating cash flow becomes a regular one.
The financing channel of the company is unobstructed. From January to August in 23 years, domestic bonds issued a total of 29.8 billion yuan, an increase of nearly five times compared with the same period last year, including 8.2 billion yuan in the lottery, 8.07 billion yuan in corporate bonds and 100 million yuan in ABS135.7, with interest rates ranging from 2.8 to 4.5 percent. As a local state-owned enterprise deeply ploughing commercial real estate operation, the company's financing advantage can be demonstrated. Thanks to the increase in sales and rebates of the company, the net cash flow generated by operating activities was 5.55 billion yuan, turning negative to positive (- 1.97 billion yuan in the same period last year). Due to the increase in payback, the superimposed financing channel is unblocked, and the company holds 17.5 billion yuan of monetary funds, an increase of 41.7% over the same period last year, laying a good foundation for follow-up investment and construction.
Risk hints: industry policy, industry downside, fair value change profit and loss risk.