Core views:
Steady operation, sales rankings continue to rise steadily. According to Kerui data, Binjiang achieved sales volume of 1,535 yuan in 2008, a slight decrease of 0.3% over the previous year. The sales growth rate was 17.4 pct ahead of the top 100 real estate companies, with a sales area of 334 square meters, an increase of 8.4% over the previous year. Relying on Hangzhou's steady real estate market, the area growth rate is in a leading position among mainstream housing enterprises. The full-caliber sales ranking rose to 11th place in '23, up 2 places from '22. Binjiang's sales ranking has been rising steadily in recent years. It has achieved No. 1 sales in Hangzhou for 4 consecutive years, making it the leading private housing enterprise with the most steady operation in the current market environment.
Bidding and cooperation go hand in hand, and the pace of investment is relatively positive. According to data from the Central Index Institute, the amount of land acquired by Binjiang in '23 was 57.7 billion yuan, and the amount was 38%. It is still leading the sample housing enterprise in acquiring land by 14 pct in January-November, adding more than 103 billion yuan in value, maintaining a relatively positive pace of investment.
The amount of land acquired through mergers and acquisitions in '23 was 61%, up 39 pct from '22. Expanding the M&A land acquisition method can ensure that Binjiang maintains a stable market share in the land market. In '23, Binjiang Hangzhou accounted for 87% of the land acquisition amount, and Hangzhou's market share was 25%, maintaining a relatively high position.
Financing is sustainable, and costs continue to decline. Binjiang Financing had a net repayment of 2.1 billion yuan in '23. The bond issuance was mostly ahead of maturity and repayment. The overall margin of safety was high, and the comprehensive financing cost was 4.20%, a further decline of 40 bps from '22. The total amount of debt maturing in Binjiang in '24 is now 8 billion yuan, and the maturing distribution is quite uniform. According to the Binjiang public account, the full year of '23 cash was returned to $73 billion, and the coverage ratio for debts due in '24 was 9.1 times. The pressure to repay debt is low, and the financial stability continues to be stable.
Profit forecasting and investment advice. Binjiang maintains its comparative advantage in investing in Hangzhou, and stable sales contribute more abundant settlement resources. It is expected that Q4 Binjiang will maintain a consistent positive settlement rhythm. The company's net profit from 23 to 24 is estimated at 44.7 billion yuan, 5.35 billion yuan, +19.9% year-on-year, corresponding to 5.9x and 4.9xPE. According to the company's interim report and three quarterly reports, it estimates NAV43.6 billion yuan, maintaining the company's reasonable value of 14.02 yuan/share, and maintain a “buy” rating.
Risk warning. The recovery in industry sentiment fell short of expectations and affected the company's sales throughout the year; gross sales margin was under pressure due to market promotion factors; the rise in the popularity of the land market led to a decline in gross investment margin, etc.