Performance maintained positive growth: In 2023, the company achieved revenue of 251.1 billion yuan, +21% year over year; of these, development and sales revenue was 212.1 billion yuan, +20% year over year; recurring business revenue was 39.1 billion yuan, +26% year over year. In 2023, the company achieved core net profit of 27.8 billion yuan, +2.9% year-on-year. The company attaches importance to shareholder returns. The dividend was 1.441 yuan per share in 2023, +2.9% year-on-year. The dividend rate of 37% was the same as in previous years. The dividend rate measured by the average stock price for the year in the financial report was 4.8%, which also remained at a good level.
Recurring business effectively and smoothly develops sales business fluctuations: In 2023, the company's recurring business (including operating real estate business, asset-light management business, and ecosystem factor business) accounted for 15.6% of revenue, an increase of 0.7 percentage points over the previous year; core net profit accounted for 34.4%, an increase of 10.4 percentage points over the previous year. Throughout 2023, the company's comprehensive gross profit margin was 25.2%. Although it fell slightly by 1 percentage point year on year, it remained at the top of the industry; among them, the gross margin of development property settlement fell 2.3 percentage points to 20.7%, while the gross margin of investment properties increased 4.0 percentage points to 69.6%, helping the company operate steadily.
Development properties maintain sales scale and investment intensity: In 2023, the company signed sales volume of 307 billion yuan, +2% over the same period. The industry ranking remained 4th. The sales scale fell only 3% from the highest point in 2021, and the market share rose sharply to 2.6%. The company is deeply involved in East China and South China, accounting for 91% of sales in Tier 1 and 2 cities. The company maintained a reasonable and stable land acquisition intensity. In 2023, it added 13.25 million square meters of land storage and construction area, +21% over the same period, and the land acquisition amount was 173 billion yuan, +20% compared to the same period. Among them, the equity acquisition amount was +2% compared to the same period, and investment in Tier 1 and 2 cities accounted for 93%, while the equity investment intensity of 52% was the same as in the past. By the end of 2023, the company's total land storage area was 62.5 million square meters, a slight decrease of 4% over the previous year, and is still abundant.
Investment property business performance was good: in 2023, the company's investment property revenue was 22.2 billion yuan, +31% year-on-year; shopping center rental revenue was 17.6 billion yuan, which maintained 81%, or +30% year-on-year. By the end of 2023, the company had 76 shopping malls in operation, of which the top three projects in local retail sales accounted for 80%, an increase of 6 percentage points over the previous year; the overall occupancy rate of shopping malls remained high at 96.5%.
Financial health is worry-free, and financing costs continue to decrease: as of the end of 2023, the company's short-term cash debt ratio was 1.49 times; the net interest-bearing debt ratio was 32.6%, down 6.2 percentage points from the previous year. In 2023, the company's weighted average cost of financing was 3.56%, down 19 basis points year over year. In 2023, the company's recurring business revenue can cover dividends and interest multiples of 1.9, and rental income covers dividends and interest multiples of 1.08.
Investment advice: We basically maintain the previous profit forecast. We expect the company's core net profit for 2024-2025 to be 304/31.9 billion yuan (original value was 305/33.9 billion yuan), with corresponding earnings per share of 4.26/4.47 yuan, respectively. Corresponding to the current stock price PE is 5.2/5.0 times, respectively, maintaining a “buy” rating.
Risk warning: Sales and settlement of the company's development properties fell short of expectations, rental income from investment properties fell short of expectations, the decline in profit levels exceeded expectations, or the decline in industry fundamentals exceeded expectations, and the effects of policy implementation fell short of expectations.