The sale of land in the core area increased both revenue and profit
The company released its quarterly report on April 26. In 2024Q1, it achieved revenue of 1.03 billion yuan (YOY +11.1%), net profit to mother of 470 million yuan (YOY +13.1%), and EPS of 0.31 yuan. The company has an operational advantage in the park development sector. The two-wing business has entered a period of development, and the photovoltaic sector is about to enter a harvest period, and the future can be expected. We maintain the company's 2024-2026 EPS profit forecast of 0.91/0.92/1.00 yuan; comparable to the company's 2024 average PE (wind consensus forecast) was 11.9 times, giving the company 11.9 times PE in 2024 and a target price of 10.83 yuan (previous value of 10.74 yuan), maintaining a “buy” rating.
Land sales for first-class development with high gross margin during the period drove revenue and profit growth. The main reason was that the Suzhou Science and Technology City plot was sold in the first quarter. While revenue increased, gross margin increased 4.4 pcts to 71.4% year over year. Due to the higher share of minority shareholders' equity in the project compared to the year-on-year settlement project last year, the share of minority shareholders' profit and loss during the period decreased by 9.5 pct year on year to 10.2%, and the net profit to mother increased 13.1% year on year under the combined impact. The company's industrial investment also continued to contribute revenue during the period, achieving a total of 40 million dollars in net investment income and net income from changes in fair value during the period. Due to the company's rapid investment pace in the past two years, Zhongyuan, the self-owned business area, has also continued to expand. The size of interest-bearing debt has increased slightly, boosting financial expenses by 0.8 billion to 26 million over the same period last year. However, the overall financial situation is steady and calm, with a net debt ratio of only 28.2% and a balance ratio of 44.4%.
Industrial investment continues to gain strength, and the new energy business is being deployed at an accelerated pace
During the period, the company continued to increase its industrial investment layout, adding 3 new industrial investment projects, mainly in the fields of the Internet of Things, new energy, pharmaceutical technology, etc., with a total proposed investment amount of 300 million yuan. By the end of 2024Q1, the company had pledged 50 projects, amounting to about 5.3 billion dollars. According to the company's annual report, by the end of 2023, 92 projects invested by the company had been listed, reported, and planned to be reported. Industrial investment continues to gain strength, promoting investment linkages, and while creating growth points for the company's profits, it is also enhancing the park's ability to empower the park. The new energy sector is also speeding up its layout. By the end of 2023, Sino-Singapore Green Energy and participating companies had completed a total of 474 MW connected to the grid, an increase of 356% over the previous year, and 211 MW of projects under construction. The photovoltaic business is about to enter a harvest period, preparing for future development.
Risk warning: The land market is declining; the Yangtze River Delta economy is declining; the expansion of the new energy business falls short of expectations.