The scale of carry-over contracted performance, and the operation of holding properties was steady, downgraded to an “increase in holdings” rating, Jindi Group released its 2023 annual report. Affected by the decline in project carry-over scale and gross margin, the company's performance during the year was under pressure. The company has relatively sufficient land reserves, focusing on Tier 1 and 2 cities, continuous optimization of debt structures, and steady diversified business operations. Affected by sluggish sales in the industry, the company's high-price project carry-over and inventory deductions eroded profits. We lowered the 2024-2025 and added 2026 profit forecast. The company's net profit for 2024-2026 is 9.6, 10.5, and 1.24 billion yuan (pre-2024-2025 values were 4.23 billion yuan, 4.62 billion yuan), EPS was 0.21, 0.23, and 0.27 yuan. The PE corresponding to the current stock price is 19.1, 17.5, and 14.8 times, downgraded to the “increase” rating.
Revenue and profit declined year-on-year, and the debt structure continued to be optimized
The company achieved revenue of 98.13 billion yuan in 2023, a year-on-year decrease of 18.4%; net profit to mother of 890 million yuan, a year-on-year decrease of 85.5%; net operating cash flow of 2.19 billion yuan, earnings per share of 0.20 yuan/share, and a cash dividend of 0.0197 yuan per share. The decline in the company's revenue was mainly due to a 21.1% and 21.7% year-on-year decline in the carry-over area and amount of real estate projects, respectively. The loss of profit was mainly due to the decline in gross margin carry-over of real estate projects from 16.16% (19.96% in 2022), and asset impairment losses narrowed to 2.42 billion yuan (3.69 billion yuan in 2022). By the end of 2023, the company held monetary capital of 29.74 billion yuan, and the balance of interest-bearing debt was 91.9 billion yuan, a year-on-year decrease of 20.2%; the debt cancellation ratio was 61.3%, the net debt ratio was 53.2%, and the weighted average cost of debt financing decreased by 17BP to 4.36%.
The scale of sales has shrunk, and soil storage is distributed in high-energy cities
The company achieved sales volume of 153.55 billion yuan in 2023, a year-on-year decrease of 30.8%; the sales area was 8.77 million square meters, a year-on-year decrease of 14.0%. The company insists on deep-cultivating high-energy cities, acquiring 950,000 square meters of land in core cities such as Shanghai, Hangzhou, Nanjing, and Xi'an during the year, with a total investment of about 12.5 billion yuan. By the end of 2023, the company's total land reserves were about 41 million square meters, and equity land reserves were about 18 million square meters, of which Tier 1 and 2 cities accounted for about 73%.
Property ownership is steady, and contract construction and real estate form a new growth pole. The company's commercial property sales increased 16% year-on-year, and obtained 9 asset-light service industry projects throughout the year; the average occupancy rate for long-term rental apartments during the mature period was 94%, and the rent collection rate continued to remain above 99%. By the end of 2023, the total contract management area for the company's construction business exceeded 28.7 million square meters, of which the residential management area exceeded 19.51 million square meters, and the contract value exceeded 239.9 billion yuan. By the end of 2023, Jindi's smart service contract management area was about 391 million square meters, of which the management area was about 231 million square meters, making continuous breakthroughs in strategic circuits such as urban services and non-residential businesses.
Risk warning: The sales recovery process is blocked, diversified business development falls short of expectations, and the company's land acquisition falls short of expectations.