The benefits of the restructuring of the company are remarkable, and there are sufficient resources for future settlement. In 2023, the company achieved operating income of 763.7 billion yuan, a year-on-year decrease of 8.3%; realized net profit of 13.1 billion yuan, an increase of 108.8% over the previous year, mainly due to the restructuring proceeds generated by Macalline's acquisition of control and inclusion in the company's consolidated statements; realized non-net profit deducted to mother was 2.41 billion yuan, a year-on-year decrease of 34.9%. The company's overall profitability remained stable, with a comprehensive gross margin of 4.4%, up 0.6 pp year on year; net margin was 2.2%, up 0.9 pp year on year. The contract debt at the end of the period was 237 billion yuan, an increase of 4.2% over the end of 2022, and there are sufficient settlement resources.

Focus on eliminating chemical and efficient repayment, and further optimize the soil storage structure. In 2023, the company achieved revenue of 166.5 billion yuan in the real estate business segment, an increase of 21.9% over the previous year, and a net profit of 191 million yuan to mother, a year-on-year decrease of 2.08 billion yuan.

In 2023, the company's real estate business segment achieved a total full-caliber sales amount of 229.5 billion yuan, an increase of 9.4% over the previous year; full-caliber sales repayments were about 2275 billion yuan, with a repayment ratio of about 99%. The company accounts for nearly 83% of equity sales in Tier 1 and 2 cities, with sales exceeding 5 billion dollars in 12 cities. The company obtained 91 lots of high-quality land using diversified methods, with a total volume amount of about 132 billion yuan. The estimated land storage equity value in Tier 1 and 2 cities accounted for about 73.6%, an increase of 5.5 pp over the previous year, and the soil storage structure was further optimized.

Adhere to professional development and stable supply chain profits. In 2023, the company's supply chain operating business revenue reached 593.4 billion yuan, a year-on-year decrease of 14.8%, and realized net profit to mother of 3.95 billion yuan, a year-on-year decrease of 1.4%. Despite a downward commodity price cycle in 2023, the company consolidated its market share of core products. The volume of C&D Steel's cooperation with major state-owned companies and large private steel mills increased by more than 23%, and the volume of cooperation with major iron ore suppliers such as international mines increased by nearly 55%; the volume of C&D Pulp and Paper cooperated with large domestic and foreign pulp suppliers increased by 16%; and the volume of C&D agricultural products cooperated with large international food merchants increased by nearly 32%. The company accelerated its international layout. Import and export and international business volume reached US$43.8 billion in 2023, an increase of 8.38% over the previous year.

The company attaches importance to the construction of international logistics channels and warehousing resource networks, introduced 13 new overseas logistics suppliers, and achieved logistics business coverage in more than 30 overseas countries and regions. The company optimized its business structure and further laid out the consumer sector. In 2023, the trade scale of the consumer goods industry exceeded 54 billion yuan, with a year-on-year growth rate of about 25%. The number of used car exports from C&D Motor increased by more than 260% year on year, ranking among the highest in the industry; the annual scale of C&D Consumer Products's mechanical and electrical equipment business increased 256% year over year.

Profit forecasting and investment advice. The company's net profit growth rate for 2024-2026 is expected to be -50.8%/7.8%/5.9%, respectively. Considering the company's sufficient land resource reserves and steady financial growth, the supply chain business grew steadily. The company was given 6 times PE in 2024, with a target price of 12.90 yuan, maintaining a “buy” rating.

Risk warning: Risks such as completion and delivery falling short of expectations, sales falling short of expectations, and supply chain business development falling short of expectations.