Matters:

The company announced its 2024 semi-annual results. The first half of 2024 achieved operating income of 1.511 billion yuan, a year-on-year decrease of 20.88%; net profit to mother was 0.562 billion yuan, a year-on-year decrease of 27.14%.

Commentary:

Land concessions have declined, and revenue is under pressure. 1) The company achieved operating income of 1.511 billion yuan in the first half of 2024, a year-on-year decrease of 20.88%; net profit to mother was 0.562 billion yuan, a year-on-year decrease of 27.14%. The decline in revenue was mainly due to a decrease in land concession area. For example, there were no residential land sales for the Xietang project in the Suzhou Industrial Park in the first half of the year. 2) By business structure, park development and operation revenue in the first half of 2024 was 1.15 billion yuan, down 23% year on year; green utility revenue was 0.297 billion yuan, down 12% year on year. Currently, commercial housing sales are declining, housing enterprises use sales to determine production, and first-class land concession revenue from company park development and operation is under certain pressure. 3) The company's investment income was 0.118 billion yuan, a year-on-year decrease of 44.73%, mainly due to the disposition of shares of Sino-Environmental Technology and other subsidiaries in the same period last year. Furthermore, the decline in other earnings and income from changes in fair value all led to an even greater decline in net profit attributable to mother.

Actively develop the operation of the Central Park in the district, and the revenue continues to grow. 1) In the first half of 2024, the revenue from the leasing business in the company's land development and operation business was 0.397 billion yuan, an increase of 11% over the previous year. The company has a location advantage in managing industrial parks and has strong ability to attract investment, and the rental revenue from Zhongyuan property in the guarantee zone continues to grow. 2) Among them, Suzhou Industrial Park has its own carrier of 2 million square meters, with a total occupancy rate of over 90%. It has entered 20 of the world's top 500 enterprises, 53 enterprises with leading scientific and technological talents, and 10 “unicorn” nurturing enterprises in Suzhou. 3) Furthermore, the Sino-Singapore Garden House platform focuses on the field of high-quality blue and white collar apartments, actively seizing “work-for-rent” apartment resources.

The main business of development and operation of the park empowers each other, and investment in green utilities and industries is progressing steadily. 1) As of the first half of 2024, Zhongxin Green Energy and Zhongxin Chunxing added 179MW of new photovoltaic power plants, mainly distributed in the Yangtze River Delta region, with more than 400 customers. The company's distributed photovoltaic power plants have accumulated 653 MW connected to the grid, and has completed 32.7% of the “2GW” photovoltaic power plant grid connection target. 2) In terms of fund investment, 4 additional funds were pledged to invest in external market-based funds, with a pledge amount of 0.16 billion yuan, boosting the total investment scale of the fund by 4.1 billion yuan; actively exploiting the combined advantages of investment and investment, 21 new projects were launched. The company has pledged to invest a total of 51 external market-based funds, with a total amount of about 4.35 billion yuan, which enabled 96 investment projects to be settled in parks, including 56 in Suzhou Industrial Park and 40 in other parks, driving a total investment of 64.1 billion yuan, and 26 projects listed and reported.

Investment advice: As the main developer of the Sino-Singapore joint venture in the Suzhou Industrial Park, the company's performance is temporarily under pressure, but the company has strong investment promotion capabilities, has a good industrial park location, actively transforms businesses such as park operation and green utilities, and gradually enhances business stability. Land concessions are uncertain. We adjusted the Sino-Singapore Group EPS forecast for 2024-2026 to 0.72, 0.78, and 0.83 yuan respectively (1.53 and 1.85 yuan in 24-25 years ago), but considering the steady growth of the company's operating business in the managed industrial park, the reference industry can compare the company's valuation and give the company 12 times PE in 2024, with a target price of 8.69 yuan, maintaining the “recommended” rating.

Risk warning: The industry continues to decline sharply; competition in different parks to attract investment intensifies; industrial investment risks.