Revenue was +35% YoY and net profit to mother +2% YoY in '23. Performance growth was steady and in line with expectations. The company announced its 2023 results. In 2023, the company achieved revenue of 134.43 billion yuan, +35%; by business, the property development business achieved revenue of 130.1 billion yuan, +35% year over year, accounting for 96.8% of total revenue; gross profit of 14.92 billion yuan, -2% year over year; net profit to mother of 5.03 billion yuan, +2% year over year, in line with expectations; basic earnings per share of 2.61 yuan, -8% year over year. The company's revenue grew rapidly, mainly due to a marked increase in the pace of real estate delivery; the company's gross profit margin for 23 years was 11.1%, -4.2 pct year on year; net interest rate due to mother was 3.7%, -1.2 pct year on year; total period rate (sales, management, finance rate) was 5.6%, -3.2 pct year on year. In addition, the company's minority shareholders had profit and loss of 1.30 billion yuan, +107% year-on-year. As of the end of '23, the company's outstanding sales amount reached $208.7 billion, or +6% year-on-year, covering 1.55 times the revenue for '23.

Sales were +12% year over year, and land acquisition intensity reached 62%. The industry ranking rose steadily in a contrarian environment. The company announced that in 2023, the company achieved full-caliber sales of 188.9 billion yuan, +12% over the same period; equity sales volume of 138 billion yuan, +14% compared to the same period, with an equity ratio of 73%; equity sales area of 6.66 million square meters, +9% compared to the same period; and the company's sales performance was more resilient. According to Kerry's list, C&D's real estate industry ranked 8th in sales, continuing to rise 2 places from the end of '22. The company's 23-year sales payback rate was 98%, +2pct year over year.

At a stage where the fundamentals of the industry have declined sharply, the company can still have firm confidence to guarantee a stable sales scale. The main benefit is that the company continues to cultivate Tier 1 and 2 cities with good supply and demand relationships, and has strong product strength and guarantees the speed of project elimination. In '23, the company added 78 new plots of high-quality land, with a land acquisition amount of 116.9 billion yuan, a land acquisition sales ratio of 62%, and a land acquisition value of 218 billion yuan. By the end of '23, the saleable area of the company's land storage was 15.52 million square meters, with an equity ratio of 76%; the company still had claims to supplement the soil storage.

The three red lines remain green, financing costs have reached a record low, and dividend rates are high. The company announced that in 2023, the company's cash in hand was 54.2 billion yuan, +8%; after excluding advance payments, the balance ratio was 61.6%, the net debt ratio was 33.6%, and the short-term cash debt ratio was 4.7 times higher. The finance remained steady, and the three red lines remained green. Currently, in the context of continued tightening of industry financing, the company's state-owned enterprise background has a clear financing advantage. At the end of the reporting period, weighted financing costs were 3.75%, down 0.19pct from the end of '22, and financing costs continued to be optimized. The company paid HK$1.3 per share for 23 years, with a dividend rate of 52% and a dividend ratio of up to 10%.

Investment analysis opinion: Stable performance, impressive dividends, sales and investment bucked the trend, and maintained a “buy” rating. C&D International Group is rooted in Fujian, adhering to a high-quality key layout. It is a real estate development platform under the Xiamen State-owned Assets Administration Commission, and the management structure is perfect; the sales growth rate is impressive, with both the soundness of state-owned enterprises and the flexibility of private enterprises; currently, the three red lines maintain a green path, and have significant financing advantages, helping to expand against adversity and overtake corners. We believe that the company's future settlement pace has declined somewhat. We lowered our 24-25 net profit forecast to 5.55 billion yuan and 6.37 billion yuan (the original forecast was 6.79 billion yuan and 7.79 billion yuan), and added a 26-year performance of 6.91 billion yuan. The current price corresponds to 24/25 PE 4.5/3.9 times, respectively, to maintain a “buy” rating.

Risk warning: The settlement profit margin declined more than expected, and the sales removal rate fell short of expectations.