Introduction to this report:
The company released operating data for February. Monthly sales weakened marginally, reaching a year-on-year decline of 59%, and the sales market needs to be stabilized; no new land reserves were added this month, and land acquisition investment in 2024 has not yet begun.
Summary:
The company released operating data for February. Contract sales fell 59% year on year. Considering the impact of the Spring Festival misalignment, it will continue to track subsequent sales performance and maintain an increase in holdings rating. Since the second half of 2023, in line with the overall performance of the market, the company has begun to experience a year-on-year decline in sales scale, and the sales market is waiting to stabilize. Maintain the company's 2023-2025 performance growth rate of -6.7%, -5.8%, and 5.5%, maintain the 2023-2025 EPS of 0.83 yuan, 0.78 yuan, and 0.82 yuan, and maintain the company's holdings increase rating.
The sharp widening of the year-on-year decline in February was affected by the high base for the same period in 2023 and the Spring Festival holiday, while the absolute sales scale remained stable since November 2023. In February alone, the company's contract sales area was 190,000 square meters, and the contract sales amount was 2.2 billion yuan (RMB, same below). The year-on-year decline was 57% and 59%, respectively, and the decline was 50 pcts wider than the previous month. In addition to overall demand remaining weak, the widening year-on-year decline was mainly due to misalignment during the Spring Festival and a high base for the same period in February 2023. Furthermore, as of the end of February, the company's cumulative unsubscribed amount was 900 million yuan, and the cumulative unsubscribed area was 70,000 square meters.
The company did not add new land reserves in February, which is basically in line with the company's past land acquisition pace. The scale of land acquisition investment by core housing enterprises rebounded sequentially in February, mainly from high-quality land plots released in cities such as Beijing and Hangzhou. As a housing enterprise focusing on third- and fourth-tier cities, the company continued its January performance with no new land reserves, which is basically in line with the company's land acquisition performance in the past 5 years.
Adhering to the middle and high-end market, the average sales price in February was lower than the cumulative average price in 2023, but it was 4% higher than in January. The average monthly sales price in February was 1,1574 yuan/square meter, down 3% from the previous year, and lower than the cumulative average price of 12,122 yuan/square meter in 2023. However, it is worth noting that the average price rose month-on-month, ending the month-on-month downward trend since November 2023. Considering that there is a certain relationship between the average price and the push structure, it is necessary to continue to track the price trend.
Risk warning: Housing prices and demand continue to decline sharply, and the market competition pattern worsened as other brands of central enterprises entered the low-energy market.