Incident: Pudong Jinqiao released its 2023 annual report. It achieved annual revenue of 6.59 billion yuan, +30.3% year over year; realized net profit of 18.2 yuan to mother, +14.9% year over year.
Revenue increased dramatically throughout the year, and high-quality projects were being eliminated. In 2023, the company achieved operating income of 6.59 billion yuan (yoy +30.3%) and net profit to mother of 1.82 billion yuan (yoy +14.9%). Real estate sales achieved revenue of 4.52 billion yuan, +36.3% over the same period, mainly due to the carry-over of revenue of 3.77 billion yuan from the Biyun Zundian project. The project has basically been settled; the company's Biyun Liyue project still has an area of 40,000 square meters to be settled. The first batch of the project was officially pre-sold in November 2023, and 80% was reduced on the first day of opening.
Land reserves are sufficient, and construction of a benchmark project has commenced. By the end of the reporting period, the company held 5 plots to be developed, with a total planned construction area of 37,000 square meters. 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. During the reporting period, the company started 2 new industrial projects in the Jinqiao area and 1 new residential project in Hongkou District. The residential project aims to build a “Biyun · North Bund” regional benchmark product and enhance the influence of the Biyun brand throughout the city.
The leasing business is developing steadily, and industrial investment continues to advance. By the end of the reporting period, the company held 3.19 million square meters of various operating properties, with an average occupancy rate of 83.3%, achieving real estate rental revenue of 1.82 billion yuan, +14.6% over the same period last year. Focusing on key industries such as future vehicles, intelligent manufacturing, and new communications, the company introduced 77 domestic and foreign projects throughout the year, completed the first direct investment project, Zhongke Xinsong funded, and successfully landed in Office Park Jinke Park. The first phase of the Pudong Intelligent Manufacturing Fund completed an investment of about 240 million yuan.
The three red lines maintain a green path, and financing channels are unobstructed. In 2023, excluding accounts received in advance, the company had a balance ratio of 55.27%, a net debt ratio of 77.98%, and a short-term cash debt ratio of 0.48. The three red lines remained stable and maintained the green level. The company's financing channels are unobstructed. In 2023, it issued 1 billion yuan of corporate bonds and 1.45 billion yuan of winning tickets, with coupon interest rates of 3.30% and 2.82%, respectively. It has been financing in the capital market for many years.
Profit forecasting and valuation: The company's revenue has increased dramatically, the leasing and sales model is at the cutting edge of real estate, and industrial investment continues to advance. As an industrial operator focusing on the development of advanced intelligent industries in the Pudong New Area, it will directly embrace the spring breeze of reform in the Pudong New Area. We expect the company's revenue for 24-26 to be $56.2, 69.1 billion yuan, and 9.12 billion yuan, respectively, and net profit to mother of 1.32 billion yuan, 15.3 billion yuan, and 1.83 billion yuan, corresponding PE of 9.3, 8.0, and 6.7 times, respectively, giving it a “recommended” rating.
Risk warning: The real estate market continues to be sluggish; policy implementation falls short of expectations; industrial investment falls short of expectations.