Introduction to this report:
The company released operating data for April. The non-development business is stable, moderate and improving, while the development business needs to continue to be repaired. It is expected to improve with policy support; investment in land acquisition has increased dramatically, and it is actively deployed in core Tier 1 and 2 cities.
Summary:
In April 2024, the company's non-development business stabilized and improved, and the development business needed to continue to be repaired to maintain an increase in holdings rating. Consistent with the overall performance of the industry, the company's sales volume declined month-on-month in April. The monthly sales volume was 8.9 billion yuan (RMB, same below), and the sales area was 590,000 square meters, down 45.9% and 38.4% year-on-year respectively. The declines were 6.4 pct and 0.7 pct narrower than the previous month, respectively.
Considering the recent intensive implementation of real estate support policies in various regions, it is expected that it will support development business performance. Maintain the company's 2024-2026 EPS at 1.93 yuan, 1.97 yuan, and 2.07 yuan, and maintain the shareholding rating.
The company fell short of the “10 billion yuan” sales threshold in April, and the average sales price rebounded slightly by 2.7% to 15,000 yuan/square meter. In April 2024, the company's sales fell 16.9% month-on-month and once again fell below the 10 billion yuan threshold. Since then, in the first 4 months of 2024, only March reached the threshold, and there is a gap between sales performance that reached the threshold every month of 2023. In terms of sales contribution, the Yangtze River Delta region, the western region, and the Bohai Rim region continued to rank in the top three with 30.9%, 29.4%, and 20% respectively. Also, judging from the average sales price, the average sales price rebounded slightly to 15,000 yuan/square meter in April. The cumulative average sales price from January to April was 14,499 yuan/square meter, which is less than the average price for the whole of 2023 (1,6070 yuan/square meter).
In April, new land storage was added to focus on core Tier 1 and 2 cities, and the intensity of land investment increased dramatically to 71%. According to Kerui data, the company added about 12 billion yuan of land in a single month, ranking 3rd in the industry. Specifically, the company added a new land reserve in Shanghai, Chengdu, Beijing, and Hangzhou respectively, with a total land area of 120,000 square meters, a total construction area of 270,000 square meters, an average unit price of 22,316 yuan/square meter, and equity consideration of 4.5 billion yuan.
Since 2024, the company's operating revenue growth rate has broadened month by month, and business restructuring has gradually deepened.
From January to April 2024, the company's operating revenue (excluding tax, same below) totaled 8.6 billion yuan, up 10.3% year on year, up 0.7 pct from the previous month, of which operating revenue was 4.5 billion yuan, accounting for 52.2%, and service revenue was 4.1 billion yuan, accounting for 47.8%.
Risk warning: The decline in demand exceeded expectations, and the development of other transformation businesses fell short of expectations