Revenue and profit increased steadily. In 2023, the company achieved revenue of 20.52 billion yuan, up 12.3% year-on-year.
Among them, real estate development revenue was 192.88 billion yuan, up 11.8% year on year; commercial property operation revenue was 6.36 billion yuan, up 20.9% year on year; other business revenue was 3.28 billion yuan, up 32.3% year on year. The Board of Directors proposes to pay a final dividend of HK45 cents per share, along with an interim dividend of HK$35 cents per share. A total dividend of HK$80 per share will be paid for the full year, with a dividend rate of 31.5%. The company's dividend ratio is 6.7% based on the April 2, 2024 stock price.
Sales increased against the market, and sales rankings improved. In 2023, the company's contract property sales were 309.81 billion yuan, up 5.1% year on year, and the sales floor area was 13.36 million square meters, down 3.7% year on year. According to Kerry's statistics, equity sales of group companies rose to second place in the industry. In 2023, the company insisted on cash flow management as the center and strengthened sales payback. Among them, Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Chengdu and Xi'an had ideal sales repayments, all of which exceeded 10 billion yuan.
The stock of soil is sufficient, and the land acquisition is focused on the frontline. In 2023, the company added 43 new plots of land in 23 cities in mainland China and Hong Kong, China. The total floor area was 7.64 million square meters, the actual equity area was 7.06 million square meters, the total land price was 134.21 billion yuan, and the equity land price was 122.66 billion yuan, an increase of 42.0% over the previous year, and the additional goods value was 24.42 billion yuan. In 2023, the company added 83.8 billion yuan of land purchases in first-tier cities, accounting for 62%, and added 35 new parcels of land in first-tier and second-tier cities, with a total land purchase amount of 123.6 billion yuan, accounting for 92%, and a corresponding goods value of 2205 billion yuan, accounting for 92%. By the end of 2023, the total land reserves of the Group's affiliated companies reached 54.03 million square meters. Among them, the Group's affiliated companies (excluding CNOOC Hongyang) have land reserves of 35.22 million square meters and actual equity of 30.39 million square meters
Commercial properties are important in parallel, and business growth targets are proposed. By the end of 2023, the Group's affiliated companies (excluding Zhonghai Hongyang) had a total holding scale of 10.14 million square meters (including those already in operation, under construction and to be built), of which 98% were located in the core area of Tier 1 and 2 cities. In 2023, the company put 12 new commercial properties into operation, increasing the total construction area by about 1.05 million square meters. The company uses an asset-light model to export and manage six new external commercial properties within 2023, covering office buildings, shopping malls and long-term rental apartments. By the end of 2023, the company had managed 1.5 million square meters of external commercial properties, 93% of which were located in the core area of Tier 1 and 2 cities.
The company proposed that, based on a 20.9% increase in 2023, commercial property revenue is expected to continue to achieve a 25% growth target in 2024.
Investment advice: “Better than the big market”. We forecast the company's 2024-2025 EPS to be around 2.59 yuan and 2.90 yuan. We are optimistic about the company's ability to develop sustainably. We believe that enterprises can gain a sustainable advantage in this round of supply-side reform competition and give the company 6-7 times PE valuation in 2024. The corresponding reasonable value range is 15.55-18.14 yuan per share, or HK$16.90-19.72 per share, giving the company an “superior to the market” rating. Risk warning: There is a risk that policies fall short of expectations and that the industry will decline.