The main business suffered a loss. In the first half of 2023, the company realized the main business income of 19.4 billion yuan, + 19% compared with the same period last year, of which the comprehensive tourism business contributed 10.3 billion yuan and the real estate business contributed 9.1 billion yuan. As of June 30, 2023, the company achieved a net profit of-1.3 billion yuan. we believe that the main reason for the loss in the company's main business is 1) affected by factors such as the location layout of some projects and the long development cycle. The speed of elimination of some of the company's projects is not as expected, and the gross profit margin has decreased compared with the same period last year. 2) in order to adapt to the market environment and speed up sales elimination, the company adopts flexible sales strategies for some real estate projects, resulting in partial value loss; 3) other factors lead to the decline of the company's performance, including the decrease of investment income, other income and financial expenses due to the loss of the associated company.
Pay close attention to the elimination of sales, do excellent increment. In the first half of 2023, the company achieved a total contracted sales area of 1.082 million square meters, with a contracted sales amount of 22.77 billion yuan, a decrease of 16% compared with the same period in 22 years. On the one hand, the company continues to improve its marketing management ability and pay close attention to sales rebate; on the other hand, the company makes excellent increments, tamps the development resource base, and smoothly expands three projects, including two residential buildings and a cultural and tourism comprehensive land. a total of 340800 square meters of land has been added. In terms of property management, as of June 30, 2023, the company has distributed 56 cities and managed 374 projects, an increase of 58 over the end of 22, and a management area of 62.15 million square meters, an increase of 33% over the end of 22.
Pay close attention to the market consumer demand, and steadily promote project expansion and mature project renovation. In the first half of 2023, the company's cultural and tourism projects received more than 44 million visitors, an increase of 74% over the same period in 22 years. On the one hand, the company continues to deepen the use and cooperation of IP to integrate IP operations in Happy Valley parks to enrich tourist experience; on the other hand, the company steadily promotes project development and mature projects to renovate, reached a light assets export agreement with the local government on the first phase of Changsha comprehensive cultural and tourism project (parent-child paradise), and carried out major construction and equipment infrastructure construction of Beijing Mayan Beach Water Park project.
Strengthen liquidity management and improve capital structure. The company firmly implements "fixed production by sales" and "fixed investment by revenue".
It's a strategy. As of June 30, 2023, the company's monetary funds increased by 2.7 billion yuan to 44.3 billion yuan compared with the beginning of 2022, accounting for more than 11% of the total assets; the cash short-debt ratio was 2.05 yuan, and the operating net cash flow was 90 million yuan, an improvement over the same period in 22 years. At the same time, the company seizes the window opportunity of improving the financing environment and continues to improve the company's capital structure through long-term and short-term debt replacement. By the end of June 2023, the company's interest-bearing liabilities totaled 134.3 billion yuan, mainly medium-and long-term liabilities, of which short-term loans and non-current liabilities due within one year accounted for 12%, and long-term loans and bonds payable accounted for 88%.
Investment advice: maintain a "better than the market" rating. Considering the full release of the pressure on the company's performance in 2022 and the gradual recovery of the culture and travel industry in the later stage, we predict that the EPS of the company in 2023 will be 0.14 yuan, the net asset per share will be 8.53 yuan, and the corresponding reasonable value range will be 5.12-5.97 yuan per share, giving PB 0.6-0.7 times.
Risk hint: there are downside risks in industry sales.