Incident: China Resources Land released operating data; Huaxia China Resources Commercial Asset Closed Infrastructure Securities Investment Fund (hereinafter referred to as “Huaxia China Resources Commercial Asset REIT”) released a fund share inquiry announcement.
Comment: Total sales volume has stabilized, high-energy value is abundant, operating real estate revenue has maintained a high growth rate, and operations are steady. The Huaxia China Resources Commercial Asset REIT has launched sales, and the company's business logic is expected to be upgraded.
Total sales volume stabilized and regional development was balanced: In December '23, the company achieved sales of 21 billion yuan, a year-on-year decrease of 57.6%, mainly due to market decline, company promotion pace, and high year-on-year base. In '23, the company achieved sales of 307 billion yuan, up 1.9% year on year. Among them, the top three regions in sales were East China (87.6 billion yuan), North China (52.1 billion yuan), and West China (42 billion yuan). The top three regions with year-on-year sales growth (not counting Hong Kong companies) were South China (+31.6%), West China (+24.5%), and Shenzhen (+23.3%). The average sales price of the company was 23,500 yuan/square Rice, same The year-on-year increase was 11.1%, further realizing the sales layout in high-energy cities.
Maintain active land acquisition with abundant high-energy value: According to Kerui data, in 2023, the company added land value of 269.7 billion yuan, an increase of 12.7% over the previous year. Specifically, the average floor price of the new land added in 2023 was 15,496 yuan/㎡, an increase of 12% over the previous year, and the single-party land value of the new land was about 37,919 yuan/㎡, an increase of 22.1% over the previous year. In terms of quantity, the company actively acquired land, and sufficient new value was added throughout the year; from a quality perspective, the company's new land storage was mainly focused on high-energy cities, so the single-sided land storage value gradually increased, and the land storage allocation was sufficient, establish better sales Foundations.
The operational real estate business maintained high growth. Huaxia Huaxia Huarun Commercial Asset REIT started sale: In 2023, the company's investment property rental income was 25.63 billion yuan, an increase of 39.4% over the previous year, and the operating real estate business grew rapidly. In November 2023, the registration of Huaxia China Resources Commercial Asset REIT on the Shenzhen Stock Exchange took effect. The underlying asset is Qingdao Vientiane City, which has a valuation of 8.147 billion yuan and plans to raise 6.923 billion yuan. On January 24, 2024, Huaxia Huarun Commercial Asset REIT entered an offline inquiry. The inquiry range was 6.784 yuan/share to 7.269 yuan/share. Based on the 2024 forecast distributable cash flow disclosed in the prospectus, the 2024 P/FFO valuation corresponding to the inquiry was between 19.89 and 21.31 times. For example, the successful listing of China Resources Commercial Asset REIT will mark the company's opening up the commercial real estate “fund-raising, construction and management withdrawal” development model, enriching equity financing methods, and speeding up the return of investment cash. On the other hand, it will upgrade the business logic and help strengthen the company's own valuation logic.
Profit forecast, valuation and rating: Considering that the downward pressure on the domestic sales market has increased since the second half of '23, which may reduce the company's future sales growth rate and gross margin repair level, we lowered the company's 23-25 forecast core EPS to 3.97 yuan (6.1% reduction), 4.12 yuan (12.5% reduction), and 4.34 yuan (20.2% reduction). The current price corresponds to the 23-25 PE core valuation to 5.1/4.9/4.6 times, respectively. As a central real estate enterprise, the company has steady sales, abundant core land reserves, and operating business development Good, strong overall strength, maintaining a “buy” rating.
Risk warning: Sales push falls short of expectations, commencement and carry-over progress falls short of expectations, industry downturn exceeds expectations, etc.