Revenue increased compared with the same period last year, and the profit level shrank greatly. By the third quarter of 2023, the company had achieved a total revenue of 5.212 billion yuan, an increase of 32.83% over the same period last year; by the third quarter of 2023, the company had achieved a net profit of 3.7106 million yuan, down 94.53% from the same period last year, mainly related to the company's entry into the settlement cycle of high-cost projects. As projects acquired in 2022 are carried forward in 2024, the company's profits may improve.
The scale of sales remained stable and the acquisition of land was not as good as planned at the beginning of the year. By the third quarter of 2023, the company had achieved a contract sales area of 43.95 million square meters, down 3.30% from the same period last year, and the contract sales amount was 8.291 billion yuan, an increase of 1.10% over the same period last year. According to the 2022 annual report, the company plans to reserve about 450,000 square meters of land capacity by auction in 2023. By the third quarter of 2023, the company's rights and interests have increased by 2226,000 square meters of real estate capacity building area, only 49% of the land expansion plan has been completed.
The company will be approved by the shareholders' meeting, and the debt structure needs to be adjusted. On October 21, 2023, the company's application for fixed increase was approved by the shareholders' meeting, and it is proposed to raise no more than 1.25 billion yuan from no more than 35 institutional investors and domestic natural persons, issue 259 million shares, and use the project construction and repayment of financial institutions loans. after the implementation of the fixed increase, the debt structure of the company may be optimized.
Investment suggestion: the parent side: as the only state-owned real estate development company listed in Xi'an, the company has the advantage of deep ploughing in the western market with Xi'an as the center; the financing side: the fixed increase plan of the company has been approved by the shareholders' meeting; the sales side: up to the third quarter of 2023, the company's sales area and amount are stable; the investment side: the cost of acquiring land is relatively low at present. It is predicted that the operating income of the company will reach 11.243 billion yuan / 11.833 billion yuan / 12.518 billion yuan in 2023-2025, and the PE multiple in 2023-2025 will be 6-5-4. With the loose financing policy and gradual repair on the demand side, we believe that the company has a great advantage in terms of both development and expansion capabilities. Maintain the recommended rating.
Risk hint: rising debt ratio risk, Xi'an market downside risk.