On March 21, 2024, the company announced its 2023 annual results: revenue of 3.302 billion yuan, +24.3% year over year; net profit to mother of 974 million yuan, +30.8% year over year.

The increase in revenue and net profit to mother was in line with expectations. With the good Greentown brand, central enterprise credit, diversified customer structure, and nationalized core city business layout, the company has achieved a steady increase in the scale of Xintuo's business, further consolidated its leading position, and maintained a market share of more than 20% in the contract construction industry for 8 consecutive years. The company's revenue grew steadily in 2023, with a consolidated gross margin of 52.2%, which was basically the same as the previous year. As the business continues to expand, the company's overall performance is more certain.

Xintuo bucked the trend and optimized the customer structure. Competition in the construction market intensified in the 2023s, with the company's new development contracts totaling 353,000 square meters, of which the government, state-owned enterprises and financial institutions together accounted for 74.7%; the total cost of new development was estimated at 10.37 billion yuan, +20.5% over the same period last year, of which the government, state-owned enterprises, and financial institutions together accounted for 69.4%. By the end of 2023, the company's total contract area was 1.196 million square meters, of which the government accounted for 26.8%, -5.8pct; state-owned enterprises accounted for 34.2%, +5.9pct; financial institutions accounted for 7.3%, +2.3 pct; and private enterprises accounted for 31.7%, -2.4 pct year on year.

Repayments have been strengthened, and accounts receivable have performed well. By the end of 2023, the company's trade and other receivables were approximately $824 million, the same as at the end of 2022. At the same time, the company clung to repayment, and the trade receivables turnover rate rose to 15.1 times (14.7 in 2022).

High dividends, high dividends, outstanding cost performance. The company announced a final dividend of 0.4 yuan/share and a special dividend of 0.1 yuan/share, with a total dividend of 1,005 billion yuan, with a dividend ratio of 103.2% (102.6% in 2022). Corresponding to the closing price on the day of this announcement, the company's dividend rate was as high as 9.6%. The company maintains a high dividend payout ratio, is full of sincerity in giving back to shareholders, and currently has a high and attractive dividend rate.

The steady growth in the company's performance is in line with expectations. We expect the company's net profit to be 1.23 billion yuan, 1.53 billion yuan and 1.84 billion yuan respectively in 2024-26, with year-on-year growth rates of +25.8%, +24.7% and +20.3%, respectively. Maintaining a “buy” rating, the current price of the company's stock corresponds to the 2024-26 PE valuation of 8.6x, 6.9x, and 5.8x.

Outreach competition exceeds expectations; Greentown brand reputation is damaged; accounts receivable recovery risk.