(1) The company's development business sales declined slightly in '23, but the industry ranking is still improving. Looking back, judging that sales growth will still face some downward pressure in the context of reduced sales due to low land acquisition efforts; (2) Furthermore, the disclosure of the company's annual report will promote bulk asset and equity transactions, operating property mortgages, and promote the issuance of REITs. Focus on its promotion of “incremental” capital, which is expected to improve short-term financial security; from a medium- to long-term perspective, as stated in the annual report: “Firmly reduce leverage, and reduce interest payments for the next two years by 1000 “More than 100 million yuan”, may be attainable Continued endogenous growth expects the sustainability assumption to be further consolidated; (3) The company disclosed in its annual report that the industry is currently undergoing deep adjustments. After comprehensive consideration, the company will not pay dividends, bonus shares, or increase share capital from the capital reserve fund in 2023. The 24E/25E/26E EPS is expected to be 0.79/0.80/0.81 yuan/share (-23%/+1%/+2% year-on-year, respectively), and the PE corresponding to the current stock price is 10.2/10.0/9.9, respectively. Taking into account that the company's sales are still facing downward pressure and leverage reduction plans, etc., it will be given an “increase in weight” rating.

Results for the full year of '23 are under pressure, mainly hampered by development business. The company achieved operating revenue/operating profit/ net profit to mother of 465.7 billion yuan/29.3 billion yuan/12.2 billion yuan respectively; (1) The year-on-year decline in operating income was mainly dragged down by a decline in development business settlement, and non-development business revenue maintained steady growth. Structurally, the development business achieved settlement revenue of 401.6 billion yuan (-10% year over year), and the non-development business achieved revenue of 64.1 billion yuan (+8% year over year), and the non-development business accounted for about 14% of revenue; (2) The year-on-year increase in operating profit was significant year-on-year The lower revenue growth rate was mainly hampered by a decline in gross margin, an increase in sales expense ratio and financial expense ratio, an increase in asset impairment losses, and a decline in investment income. Specifically, the overall gross margin decreased by 4.3 pct to 15.2%, the sales expense ratio increased by 0.2 pct to 2.6%, the management expense ratio decreased by 0.7 pct to 1.2%, the financial expense ratio increased 0.3 pct to 0.8%, and asset impairment losses increased by 3 billion to 3.5 billion yuan. The ratio of investment income to revenue decreased by 0.2 pct to 0.6%; (3) the growth rate of net profit to mother Slightly lower than the growth rate of operating profit, mainly due to a slight increase in the income tax rate and minority shareholders' profit and loss ratio. Specifically, the income tax rate (income tax/total profit) increased by 3.1 pct to 31.4%, and the ratio of minority shareholders' profit and loss to net profit increased 0.8 pct to 40.5%; (4) According to the company's annual report, considering that the industry is currently undergoing deep adjustments, it was decided not to pay dividends in '23.

Looking back, the company's planned completion area in '24 was 2.06 million square meters, down 30% from the actual completed area; at the same time, the average price of sales and outstanding sales at the end of '23 was 15,413 yuan/square meter, down 2.2% from the end of '22; in summary, it is determined that development business revenue is expected to fall in volume and price decline or is still facing downward pressure. At the same time, against the backdrop of declining housing prices in the past two years, it is determined that settlement gross margin may still fluctuate at the bottom.

Sales declined slightly for the full year of '23, and the industry ranking rose to second place. The company achieved full-caliber sales volume of 376.1 billion yuan (-10% YoY), sales area of 24.66 million square meters (YoY -6%), unit sales price of 15,252 yuan/square meter (YoY -4%). According to the Kiri ranking, the company's 23-year full-caliber sales ranking rose 1 place to second place in the industry; the 23-year equity land acquisition amount was 46.3 billion yuan (-7% YoY), and the equity floor price was 13.899 yuan/square meter (YoY +13%), estimated The full-caliber investment strength is 22% (Up 2 pct from '22), it is still at a low level, judging that the saleable value in '24 may shrink further.

In terms of soil storage, by the end of '22, the estimated unsold construction surface (in planning+under construction - sold unfinished) was 58.48 million square meters (-17% YoY), corresponding to a static removal period of about 2.4 years at the end of '23.

By increasing the capital safety cushion through bulk asset and equity transactions, it is planned to reduce interest-bearing debt by more than 100 billion dollars in an orderly manner over the next two years. As of the end of the year 23, the company's interest-bearing liabilities amounted to 3201 billion yuan (+2% year over year), monetary capital of 99.8 billion yuan (-27% year over year), the company disclosed a net debt ratio of 54.7% (+11.0 pct year over year), pre-determined balance ratio of 65.5% (-2.1 pct year over year), and short cash debt ratio 1.6 (-0.5 year over year); structurally, interest-bearing debt ratios maturing within one year or more were 20%/80%, respectively, -1 pct/+1 pct, bank loans/ payable bonds and other loans accounted for 62%/ 25%/14%, +1pct/+1pct, with domestic debt/overseas debt accounting for 80%/20%, respectively, and +2pct/-2pct year-on-year respectively; in addition, the company's annual report and performance materials mentioned (1) achieving repayment of no less than 30 billion yuan through bulk asset and equity transactions in 24 years to increase the financial safety cushion; (2) reduce interest payment debt by more than 100 billion dollars in the next two years, and reduce leverage in an orderly manner; (3) revitalize early investment in operating assets through operating property loans, and have added new operations since 24 $10.89 billion in sex property mortgages.

The Diecheng strategy for the property services sector has borne fruit, and the three major operating business sectors are successively promoting the issuance of REITs. (1) Property management: Achieved revenue (including internal services) of $33.4 billion (+10%) in 23 years, including revenue from community space services of 18.9 billion yuan (+13% year over year), revenue from commercial enterprises and urban space services of 11.7 billion yuan (+5% year over year), and revenue from AIoT and BPaaS solutions services of 2.8 billion yuan (+17% year over year). The sector Diecheng strategy has achieved results, driving the overall gross margin of residential properties to increase by 3.5 pct; (2) Long-term rental: achieved revenue in 23 years (including non-consolidated table) 3.5 billion yuan (+7% YoY), cumulative number of opened rooms 180,000 (YoY +8%), 233,000 managed rooms (+8% YoY), 95.8% occupancy rate at the end of 23 (+0.2pct compared to year 22). Guaranteed rental REIT has completed asset-side sorting and evaluation, and is carrying out reporting work; (3) Commerce: Achieved revenue over 23 years (including non-consolidated accounts) of 9.1 billion yuan (YoY +5%), with a cumulative construction area of 11.58 million square meters, 14.63 million square meters of leasing power at the end of 23 Rate 94.8% ( +1.6 pct). Currently, CICC Yinli Consumer REIT has completed an offline inquiry, and is expected to raise 3.26 billion yuan, and has received subscription support from the majority shareholder Shenzhen; (4) Logistics: Achieved revenue of 4.2 billion yuan (including non-consolidated accounts) of 4.2 billion yuan (+17% year over year), including high-standard warehouse revenue of 2.3 billion yuan (+6% year over year) and cold storage revenue of 1.88 billion yuan (+34% year over year). The total number of leasable projects under construction is 1.02 million square meters (+4% year over year), and the number of projects under management is 162 million yuan (YoY) Warehouse logistics REIT The application materials have been accepted by the Securities Regulatory Commission.

Investment suggestions: (1) The company's development business sales declined slightly in '23, but the industry ranking is still improving. Looking back, it is judged that sales growth will still face some downward pressure in the context of reduced sales due to low land acquisition efforts; (2) Furthermore, the disclosure of the company's annual report will promote bulk asset and equity transactions, operating property mortgages, and promote the issuance of REITs. Focus on its promotion of “incremental” capital, which is expected to improve short-term financial security; from a medium- to long-term perspective, as stated in the annual report: “Firmly reduce leverage in the next two years Interest debt of more than 100 billion yuan”, Sustainable endogenous growth may be achieved, and the assumption of sustainable management is expected to be further consolidated; (3) The company disclosed in its annual report that the industry is currently undergoing deep adjustments. After comprehensive consideration, the company will not pay dividends, bonus shares, or increase share capital from the capital reserve fund in 2023. The 24E/25E/26E EPS is expected to be 0.79/0.80/0.81 yuan/share (-23%/+1%/+2% year-on-year, respectively), and the PE corresponding to the current stock price is 10.2/10.0/9.9, respectively. Taking into account that the company's sales are still facing downward pressure and leverage reduction plans, etc., it will be given an “increase in weight” rating.

Risk warning: The pace of operating property loans and asset transactions fell short of expectations, incremental capital fell short of expectations, the pace of leverage reduction fell short of expectations, debt payments fell short of expectations, the downturn in the industry further dragged down company sales, and the decline in asset quality exceeded expectations.