Operating profit continued to grow, industrial investment accelerated, and maintained a “buy” rating. Pudong Jinqiao published its 2023 annual report. Thanks to the centralized carry-over of the Biyun Zundian project, the company's revenue and profit increased year-on-year. Affected by the lag in carry-over resources, we lowered 2024-2025 and added a profit forecast for 2026. The company's net profit for 2024-2026 is 1,484, 16.74, and 1,901 billion yuan (the original value in 2024-2025 was 15.06 billion yuan and 1.937 billion yuan), corresponding EPS was 1.32, 1.49, 1.69 yuan, and the current stock price corresponding to PE is 8.3, 7.3, and 6.4 times. The company has sufficient marketable real estate resources. Rental income is rising steadily, location advantage and industry The agglomeration effect was significant, maintaining the “buy” rating.

High gross profit carry-over boosted performance. Land reserve expenses increased the company's revenue of 6.585 billion yuan in 2023, up 30.31% year on year; achieved net profit of 1,819 billion yuan, up 14.85% year on year; achieved net operating cash flow of 6.703 billion yuan, basic earnings per share. Gross margin and net interest rate were 68.1% and 27.3%, respectively, down 0.4 and 3.4 percentage points, respectively. The increase in the company's performance stemmed from the centralized carry-over of the Biyun Zundi Phase II project, a high-margin residential project, which increased net profit accordingly; the cash outflow was mainly due to land reserve expenses of 6.181 billion yuan and development and construction expenses of 3.23 billion yuan.

The combined leasing and sales operation is steady, and industrial investment is advancing at an accelerated pace

The company adheres to the business model of combining rental and sale. Office Park Jinke Park was completed and put into operation in 2023, and the T25 renovation and expansion project was started. By the end of the year, the company held a total of about 3.19 million square meters of operating properties, with an average occupancy rate of 83.3%; it achieved annual rental revenue of 1.82 billion yuan, an increase of 14.6% over the previous year, and a gross margin of 57.7%. In 2023, the three-in-one investment layout of the company headquarters+Shengyang Fund+Shengxun Investment was basically completed. The first direct investment project was funded by Zhongke Xinsong, and the first phase of the Pudong Intelligent Manufacturing Fund completed an investment of about 240 million yuan.

The saleable value is abundant, and the park has sufficient reserves for renewal

The company has sufficient residential projects under construction. In early 2023, it successfully competed for the implementation of the Hongkou North Bund residential land project. At the end of the year, it competed for the Zhuqiao residential plot. The Zhoupu project was first opened in November and the elimination rate reached 80%. By the end of 2023, the total construction area of the company's market-based outward sales residential projects reached 1.53 million square meters, with an estimated value of 32 billion yuan. In terms of park resources, the Biyun commercial complex plan was officially approved in February 2024, with a total construction area of about 360,000 square meters, and efforts are being made to start construction within the year. The company's financing channels are unobstructed. In 2023, 1 billion yuan of corporate bonds and 1.45 billion yuan of winning notes were issued respectively, with coupon interest rates of no more than 3.3%; the total amount of financing at the end of the period was 15.54 billion yuan, with an average financing cost of 3.0%.

Risk warning: Project expansion falls short of expectations, industry introduction falls short of expectations, and the risk of new housing price fluctuations in Shanghai.