毛利率&计提减值压力，1H24归母净利润下滑：1H24公司实现营收695.62亿元，同比+22.1%；归母净利润20.45亿元，同比-19.6%.occurrences
On September 5, 2024, Greentown China released the August 2024 operating data report. The total sales amount for January-August 2024 was 165.6 billion yuan, -2.9% YoY, of which self-funded sales were 104.5 billion yuan, -11.4% YoY; contract sales were 61.1 billion yuan, +16.4% YoY.
reviews
Due to gross margin & depreciation pressure, 1H24's net profit to mother declined: 1H24 achieved revenue of 69.562 billion yuan, +22.1% year over year; net profit to mother of 2.045 billion yuan, -19.6% year over year.
The main reason for the year-on-year decline in net profit due to: ① In the context of the downturn in the real estate market, 1H24 gross margin level was 13.1%, down 4.3 apt year on year, but it is comparable to the gross margin level for the full year of 2023: ② joint venture performance loss, 1H24 joint venture achieved a loss of 0.21 billion yuan, a year-on-year decrease of 0.696 billion yuan; ③ calculated net loss of 1.75 billion yuan from impairment of non-financial assets and changes in fair value.
The sales scale is resilient, and the repayment rate is leading in the industry: 1H24's total contract sales amount was 126.5 billion yuan, -5.7% year over year, of which self-investment sales amount was 85.4 billion yuan, -13.0% year over year (average growth rate of TOP100 housing enterprises -42%), and the self-investment ranking rose to 6th in the industry (7th in 2023). Focusing on the core, Tier 1 and 2 cities accounted for 80% of sales in 1H24, and sales in 13 cities entered the top ten in the region. Payback is efficient, with a 1H24 sales payback rate of 103%, which is high in the industry, effectively supporting cash flow and reinvestment.
Prudent investment, high-standard payment, focused land storage, and reasonable structure: 1H24 added 15 new projects, acquired 15.4 billion yuan in equity and land, and is expected to increase the value of 33.3 billion yuan. Focusing on land acquisition in core cities, 1H24 core second-tier land acquisition accounted for 94% of the value, distributed in 8 cities including Hangzhou, Xi'an, and Suzhou. As of 1H24, the company's total land storage projects were 151, with a total construction area of 31.93 million square meters and a saleable floor area of 21.43 million square meters, of which Tier 1 and 2 cities accounted for 79% of the goods value, 57% of the Yangtze River Delta cities, and 55% of the top ten strategic core cities including Beishanghang. Smooth financing channels, financial security and stability: 1H24 issued 5.134 billion yuan of domestic debt, and completed overseas financing replacement of $0.817 billion; the total interest-bearing debt financing cost was 4.0%, a year-on-year decrease of 40BP; short-term Interest-bearing debt accounts for 23.8% of total interest-bearing debt. It remains low, and there is little pressure to repay short-term debt.
Investment advice
The company's sales are resilient and investment is carefully focused. In the future, performance is expected to gradually improve as high-quality projects enter the market after 2022 and carry over. Considering gross margin and depreciation pressure, the company's 2024/2025/2026 net profit was adjusted to 3.34/3.92/4.43 billion yuan (previously 3.61/4.7/5.5 billion yuan). The year-on-year growth rates were 7.2%, 17.2%, and 13.1%, respectively.
The current price of the company's stock is 4.5/3.9/3.4 times the PE valuation, maintaining a “buy” rating.
Risk warning
The implementation of policies fell short of expectations; sales in the real estate market continued to be sluggish; other housing companies defaulted.
