The company released the main operating data for 2024H1: The total number of new contracts signed by 2024H1 reached 2479.7 billion yuan, +10% over the same period last year. In the first half of the year, it achieved 55% of the target amount of new contracts signed for the whole year.
Housing construction business: steady growth, business structure optimization. In 2023, revenue was 1383.7 billion yuan, +9.4% year over year; new contracts signed for the whole year were 2689.4 billion yuan, +8.8% year over year. The company focuses on the middle and high-end “new housing construction” sector. The industrial plant sector grew significantly in 2023, with a new contract amount of 621.8 billion yuan, +58.9% over the same period last year.
2024H1's housing construction business achieved a new contract amount of 1,532 billion yuan, +5.7% over the same period last year.
Infrastructure business: The amount of new contracts signed continues to rise. In 2023, we achieved revenue of 556.6 billion yuan, +12.8% year over year, and signed new contracts of 1168.5 billion yuan throughout the year, or +15.1% year over year. The company seizes development opportunities in the infrastructure segment. In 2023, the amount of new contracts signed in the fields of municipal engineering, transportation engineering, energy engineering, water and environmental protection, water conservancy and water transportation was +17.0%, -21.7%, +151.4%, +2.1%, and +229.6%, respectively. 2024H1 achieved a new contract amount of 749.1 billion yuan, a year-on-year increase of 34.9%.
Real estate business: bucking the trend, increasing land reserves in core cities, accumulating and underdeveloped. In 2023, we achieved revenue of 308.8 billion yuan, +9.5% year over year; achieved contract sales of 451.4 billion yuan, +12.4% year over year; added 13.1 million square meters of land reserves, of which more than 90% were located in Tier 1 and 2 cities. With the capital and platform advantages of central enterprises, it bucked the trend and laid out high-quality land plots in Tier 1 and 2 cities. China Construction Yipin, Zhonghai Real Estate, China Construction Smart Land, and 2024H1 ranked 2/7/9/17 in the industry in terms of equity acquisition amounts, and 2024H1's full-caliber sales volume ranked second in the industry. The full-caliber sales amount in June ranked first in the top 100, hitting a new high in the past year, and the company's real estate business market share is expected to further increase in the future.
Highlight 1: Accelerating overseas business development. The company's overseas business covers dozens of countries and regions in North America, Central America, Hong Kong and Macau, Southeast Asia, North Africa, Central and West Africa, South Africa, the Middle East, Central Asia, etc. The new contract amount for 2024H1 was 123.1 billion yuan, an increase of 105.4% over the previous year, and the scale of overseas business is expected to usher in a new breakthrough.
Highlight 2: The dividend ratio is increasing steadily, and the high dividend ratio shows the investment value. The company has continued to pay cash dividends every year since its listing, with a dividend rate of 20.82% in 2023. Continued steady growth performance is expected to support a steady increase in the dividend rate in the future. The company's dividend rate TTM corresponding to the current price is 4.94%, ranking 8th among 158 listed companies in the construction industry. The dividend rate and dividend ratio are higher than the other seven major construction state-owned enterprises.
Highlight 3: Valuations of high-quality central enterprises need to be repaired. In 2024, the State Assets Administration Commission will comprehensively carry out market value management assessments of listed companies. Driven by steady growth in performance+market value management assessments of central enterprises, the company's valuation level is expected to recover.
Investment advice: As the leading domestic construction+real estate leader, the construction business market share is expected to increase steadily, and the market share of the real estate business is expected to continue to increase. The market value management assessment of central enterprises is expected to drive valuation repair, and the high dividend ratio has investment value. We expect the company's net profit to the mother in 2024-2026 to be 57.454/60.36/63.256 billion yuan respectively. The current price corresponds to 2024-2026 PE, 4/4 times, respectively. Covered for the first time, it was given a “recommended” rating.
Risk warning: Housing infrastructure investment falls short of expectations, risk of project investment, risk of changes in the international business environment.