Core views

In the first half of the year, the company achieved revenue of 1.23 billion yuan, up 126.5% year on year, mainly due to a sharp increase in property sales revenue; realized net profit of 0.27 billion yuan, down 32.1% year on year; performance declined due to revenue growth, mainly due to the company's sale of Zhang Run Building to Huaan Zhangjiang Industrial Park REIT in the first half of last year, and received nearly 0.4 billion yuan in investment income, but there was no such revenue in the first half of this year. At the end of 2023, the total construction area of the company's properties for rent was 1.33 million square meters. With the completion of a total of 2.928 million square meters in the first half of the year and the number of projects under construction entering the market one after another, the scale of the company's properties for sale and lease will continue to grow, forming strong support for the main business. By the end of the first half of the year, the company's cumulative industrial investment had reached 9.44 billion yuan, an increase of 8.4% over the previous year, and industrial investment was further enhanced.

occurrences

The company released its 2024 mid-year report, and achieved operating income of 1.23 billion yuan in the first half of the year, an increase of 126.5% over the previous year; realized net profit to mother of 0.27 billion yuan, a year-on-year decrease of 32.1%.

Brief review

A decrease in one-time revenue led to a decline in performance. The company achieved revenue of 1.23 billion yuan in the first half of the year, an increase of 126.5% year on year, mainly due to a sharp increase in property sales revenue; realized net profit of 0.27 billion yuan to mother, a decrease of 32.1% year on year. The company's comprehensive gross margin in the first half of the year was 60.1%, down 6.5 percentage points from the previous year; revenue growth led to a decline in performance, mainly due to the company's sale of Zhang Run Building to Huaan Zhangjiang Industrial Park REIT in the first half of last year, and received nearly 0.4 billion yuan in investment income, and no such revenue in the first half of this year; the total investment income and profit and loss from fair value changes in the first half of the year was 0.07 billion yuan, down 83.8% from the previous year.

The Zhangjiang Science City has been expanded, and regional construction is progressing steadily. In the first half of the year, the company completed 3 projects with a total construction area of 0.508 million square meters; there are 14 projects under construction, with a total construction area of 2.42 million square meters. Among them, the Kangqiao Huikang Tiandi plot project acquired by the company at the end of 2023 began construction in May 2024, and Zhangjiang Science City was expanded again. At the end of 2023, the total construction area of the company's properties for rent was 1.33 million square meters. With the completion of a total of 2.928 million square meters in the first half of the year and the number of projects under construction entering the market one after another, the scale of the company's properties for sale and lease will continue to grow, forming strong support for the main business.

Industrial investment has been further strengthened. In the first half of the year, the company successfully established the Zhang Jiang Sui Yue Fund and the Zhang Jiang Suifeng Phase II Fund. By the end of the first half of the year, the cumulative industrial investment scale had reached 9.44 billion yuan, an increase of 8.4% over the previous year. Among them, there were 55 direct investment projects, with an investment amount of 40.8 yuan; 30 participating funds pledged an investment of 5.46 billion yuan, leveraging a capital scale of 58.9 billion yuan. Under the “direct investment+fund+incubation” model, industrial investment has been further strengthened.

The profit forecast was lowered and the buying rating was maintained. We forecast the company's EPS for 2024-2026 to be 0.62/0.69/0.77 yuan respectively (the original forecast was 0.71/0.82/0.92 yuan). We are optimistic about the growth space brought to the company by the continued promotion of park construction and industrial investment, and maintain the purchase rating.

Risk analysis

The company's main risks are:

1) Property sales settlement may fall short of expectations: The company's property sales method is mainly packaged sales of R&D office and other types of properties. If affected by factors such as increased market supply and reduced customer demand to purchase properties, the company's property sales scale may be uncertain.

2) Property rental levels may fall short of expectations: the company's nearly 2.42 million square properties will be gradually completed and delivered in the future. If the pace of completion and delivery falls short of expectations, the size of the company's rental properties will be greatly affected; in addition, if R&D office properties in other areas attract more market demand, the occupancy rate of the company's own properties may be adversely affected.

3) The development of the investment target may fall short of expectations: the company is making a lot of efforts in the field of industrial investment, and the investment targets it holds are in many industries. If the future development of the investment target falls short of expectations, the company's return on investment will be negatively affected, which in turn affects profit on the reporting side.