The industry ranking remains leading, financing support is sufficient, and the “increase in holdings” rating is maintained. Vanke released operating data for January-August 2024. The company's sales scale contracted year-on-year from January to August 2024. The unit sales price declined, and the sales scale steadily ranked third in the industry. Land acquisition intensity shrank, land storage was relatively sufficient, loan guarantee actions were frequent, the financing side received sufficient support, and the debt structure was continuously optimized. We maintain our profit forecast. We expect the company's net profit to be -6.05, 0.075, and 2.755 billion yuan respectively in 2024-2026, EPS is -0.51, 0.01, and 0.23 yuan respectively. The PE valuation corresponding to the current stock price is -12.6, 1007.5, and 27.6 times, respectively, maintaining the “increase” rating.

Sales volume contracted year-on-year, and industry rankings remained leading

In August 2024, the company achieved a sales area of 1.227 million square meters, a year-on-year decrease of 22.14%, and achieved a sales amount of 17.24 billion yuan, a year-on-year decrease of 23.75%. From January to August 2024, the company achieved a cumulative sales area of 12.076 million square meters, a year-on-year decrease of 25.67%, and achieved a sales amount of 163.78 billion yuan, a year-on-year decrease of 34.12%. In August 2024, the company's project sales unit price was 14051 yuan/square meter, down 2.06% year on year. From January to August 2024, the cumulative sales unit price of the company's project was 13,562 yuan/square meter, down 11.37% year on year. According to Kerry data, from January to August 2024, the company ranked third in the industry in terms of full-caliber sales amount. The sales scale was clearly ahead of the industry average, and the industry ranking continued to maintain its leading position. In August 2024, the company had no new development or logistics real estate projects.

Loan guarantee actions are frequent, and financing support is strong

In 2024, the company made frequent loan guarantees, and the financing side received sufficient support. At the 2023 Annual General Meeting of Shareholders, the company deliberated and agreed that the holding subsidiary should guarantee the credit business and other business of banks and other financial institutions of the parent company or other holding subsidiaries, and that the total amount of additional guarantees provided during the validity period of the authorization shall not exceed RMB 150 billion. On September 4, 2024, the company issued an announcement disclosing information on two loans where its holding subsidiary provided guarantees for bank loan matters. The first loan was provided by Ping An Bank Co., Ltd. Shenzhen Branch, with a principal amount of 3.5 billion yuan. The current loan balance is 2.946 billion yuan, and the term is 3 years. The guarantee methods include pledge, collateral and guarantee guarantees. The second loan was provided by the Shenzhen branch of Bank of Communications Co., Ltd. as the lead bank syndicate. The principal amount is 7.98 billion yuan. The current loan balance is 1.6 billion yuan, and the term is 5 years. The guarantee method is a pledge guarantee.

Risk warning: Industry recovery falls short of expectations, policy relaxation falls short of expectations, and company sales recovery falls short of expectations.