The 23-year performance was +109%, and the year-on-year ratio after excluding Macalline was -34%, with a dividend of 0.7 yuan per share and a dividend ratio of 7.1%.
The company released its 2023 annual report. The company achieved revenue of 763.68 billion yuan, -8.3% year on year; total profit of 20.79 billion yuan, +28.6%; net profit to mother of 13.10 billion yuan, +108.8% year on year; earnings per share of 4.29 yuan (excluding perpetual debt), +123.4% year on year; net profit to mother after excluding Macalline's restructuring income was 3.58 billion yuan, or -34.0% year on year. The decline in the company's revenue stemmed from the supply chain business revenue of -14.8% year-on-year, in addition to the real estate division's revenue +21.9% year-on-year. The company's net profit to mother increased significantly. By segment, 1) the company and its subsidiary Lianfa Group acquired control of 29.95% of Macalline's shares, confirming the restructuring revenue of 9.62 billion yuan, including 9.52 billion yuan of restructuring revenue; 2) Net profit from the supply chain operation business segment was 3.95 billion yuan, a year-on-year decrease of 55 billion yuan; 3) The net profit of the real estate business segment to mother was 190 million yuan, a year-on-year decrease of 2,075 billion yuan, of which C&D Real Estate contributed 2,050 billion yuan and MediaTek Group contributed 1.888 billion yuan; 4) Furniture stores The operating segment contributed to mother's net profit - $563 million. The company's comprehensive gross profit margin in '23 was 4.4%, +0.6pct year on year; the rate for the period was 2.1%, +0.6pct year on year; net profit margin was 2.2%, +0.9pct year on year. In addition, the company lost 5.31 billion yuan in assets and credit impairment, including a depreciation of 1.27 billion yuan for Macallon and a decrease in real estate inventory prices of $3.30 billion, etc. Credit impairment led to a decrease in the company's performance of 2.43 billion yuan. As of the end of '23, the company's contract liabilities (accounts receivable in advance) were 237.9 billion yuan, +4.6% year on year; the company plans to pay a dividend of 0.7 yuan per share, and the proposed discovery dividend accounts for 58.7% of net profit to mother after excluding restructuring proceeds, an increase of 20.4 pct compared to the previous year's cash dividend, corresponding to a dividend rate of 7.1%.
Real estate: Sales rankings continue to rise, repayments are high, land acquisition efforts are active, and performance is declining a lot due to losses from MediaTek.
In 2023, the real estate division's revenue was 166.5 billion yuan, +21.9% year on year; net profit of 5.29 billion yuan, -24.7% year on year; net profit to mother was 190 million yuan, -91.6% year on year, and the performance declined a lot; real estate division gross profit margin was 11.5%, -3.1 pct year on year; net profit margin was 3.2%, -2.0pct year on year. In 2023, sales were 229.5 billion yuan, +9.4% year over year; the repayment amount was 2275 billion yuan, with a repayment rate of 99%; of these, C&D Real Estate sold 189.1 billion yuan, +6.1% year over year; and MediaTek sold 40.3 billion yuan, +28.0% year over year. The company accounts for nearly 83% of equity sales in Tier 1 and 2 cities. In 2023, C&D's real estate sales ranked 6th in the country, up 4 places from the end of '22, and overtook the corner of adversity.
In terms of investment, the amount of land acquired in 2023 was 132 billion yuan, +27% year over year; the land acquisition area was 8.75 million square meters, +56% year over year; the land acquisition/sales amount ratio was 58%, and the land acquisition/sales area ratio was 83%. The company accounts for more than 90% of the amount of land acquired on the first and second tier, focusing on core cities such as Shanghai, Xiamen, Beijing, and Hangzhou. By the end of 2023, the company's land storage scale was 23.09 million square meters, with a corresponding goods value of 333 billion yuan.
Supply chain: 23 years of revenue -15% YoY, year-on-year performance -1%, stable performance, active integration into domestic and international dual cycles.
In 2023, the supply chain segment's revenue was 593.4 billion yuan, -14.8% year on year, net profit of 3.92 billion yuan, -7.4% year on year; net profit to mother was 3.95 billion yuan, -1.4% year on year. Performance declined slightly due to significant fluctuations in commodity prices, and the performance was relatively stable. The gross profit margin of the supply chain segment was 2.0% and the net profit margin was 0.7%, +0.4% and +0.1% year-on-year, respectively. The company actively integrates into a new development pattern where domestic and international dual cycles promote each other. On the international front, the company achieved total imports and exports and international trade of US$43.8 billion in 23 years, +8% over the same period last year. Among them, in 2023, the scale of trade between the company and APEC countries exceeded 29 billion US dollars, an increase of more than 9%; the scale of trade with countries along the “Belt and Road” was nearly 17 billion US dollars, an increase of more than 16%; and the scale of trade with RCEP member countries exceeded 15 billion US dollars, an increase of more than 10% over the previous year. On the domestic side, the company is deeply involved in the domestic East China and South China markets, and actively explores the central and western regions. In 2023, the business scale of the company's procurement from suppliers in the Midwest and sales to customers in the Midwest all exceeded 200 billion yuan, an increase of about 8% over the previous year.
Investment analysis opinion: High dividends, high dividends, positive operating performance, and maintaining a “buy” rating. As a state-owned enterprise in Xiamen, C&D Co., Ltd. is mainly engaged in two major businesses: supply chain operation and real estate. The operating performance is positive and the dividends are considerable; the real estate division MediaTek Group and the furniture store Macalline will gradually recover losses, and the supply chain business will double cycle at home and abroad, and the performance is growing steadily. Considering the slowdown in the company's real estate settlement in the future, Macalline's performance is under short-term pressure, we lowered our 24-25 net profit forecast to 50.3 billion yuan and 5.99 billion yuan (original value was 6.63 billion yuan, 7.65 billion yuan), and the corresponding 24-year performance forecast was 7.03 billion yuan. The corresponding 24/25PE was only 5.9X/5.0X, which is significantly lower than the valuation level of comparable companies. We are optimistic that the company will maintain a “buy” rating based on the two-wheel drive of the real estate and supply chain business.
Risk warning: Sales in the real estate industry fell beyond expectations. The company received a warning letter from the Xiamen Securities Regulatory Bureau, and the company's relevant personnel received regulatory discussions and decisions on measures.