Incident: China International Trade announced its 2023 annual report, achieving annual revenue of 3.95 billion yuan, +14.86% year over year; net profit to mother of 1.26 billion yuan, +12.8% year over year.
Revenue & net profit increased by double digits, and profitability reached a new high. The company achieved revenue of 3.95 billion yuan (yoy +14.86%) and achieved net profit of 1.26 billion yuan (yoy +12.8%) for the full year of 2023, of which the property leasing and management business achieved revenue of 3.38 billion yuan (yoy +7.25%), and the hotel business achieved revenue of 570 million yuan (yoy +107.4%), achieving a strong recovery. In terms of profitability: The company achieved a gross profit margin of 58.0% (yoy+1.47pct) in 2023, and profitability continued to increase.
Overall rental rates for owned properties have increased, occupancy rates remain high, and revenue sources are resilient. In terms of rent: The average rent for the company's office buildings in 2023 is 638 yuan/m2/month (yoy +1.8%); the average rent in the mall is 1,279 yuan/m2/month (yoy +10.4%); the average rent for apartments is 370 yuan/m2/month (yoy -1.6%), and the company's overall owned property rent has achieved positive growth. In terms of occupancy rate: The average occupancy rate of the company's office buildings in 2023 is 95.9%; the average occupancy rate of the mall is 98.2%; the average occupancy rate of apartments is 85.9%. The overall occupancy rate remains high. Combined with the increase in rent levels, the company's future revenue sources are quite resilient.
The company's debt index continues to be optimized, and the debt structure is safe and stable. In terms of debt structure: The company's balance ratio in 2023 was further optimized to 24.67% compared to last year's low (28.68%); the total EBITDA debt ratio increased to a safe range of 1.37 million from last year (0.98) due to repayment of 51 million long-term loans during the period; the interest guarantee ratio increased to 24.61 compared to last year (16.62) due to good operating conditions, further improving solvency.
The dividends exceeded expectations, and the allocation value was outstanding. In 2023, the company plans to distribute a cash dividend of 8 yuan (tax included) to all shareholders for every 10 shares, and the company plans to distribute a cash dividend of 5 yuan (tax included) for every 10 shares to all shareholders. In 2023, the company's cash dividends accounted for 64%, special cash dividends accounted for 40%, and the two combined cash dividends accounted for 104%. The company's dividend ratio after adding additional dividends exceeds 100%, reflecting the importance the company attaches to shareholder returns. In the long run, the company's allocation value is prominent.
Profit forecasting and valuation: The company's size and profit reached new highs, and the revenue sources are resilient, and the debt structure is safe and stable. Dividends that exceed expectations highlight the value of the allocation. We expect the company's revenue for 24-26 to be 39.6, 41.6, and 4.42 billion yuan, respectively, and net profit to mother of 12.0, 12.5 billion yuan, and 1.34 billion yuan, corresponding PE of 18.4, 17.7, and 16.5 times, respectively. For the first time, coverage was given a “recommended” rating.
Risk warning: Rental rate declined; rent collection rate declined; macroeconomic policies fell short of expectations.