Jingu Financial News | Open Source Securities Research Report pointed out that Longfor Group (00960) focuses on development, operation, and service three main businesses, covering a comprehensive layout of five major channels. Among them, real estate development deeply cultivates core cities, with abundant land reserves to meet future development for over 3 years; commercial investment has been developing for over 20 years, entering over 30 cities by the end of 2023, with 141 and 88 shopping centers respectively acquired and operated; long term rentals have opened over 300 stores, with a rental rate of 95.5%, a total of 0.123 million units already in operation, ranking second in the industry in terms of total units already in operation; property management and agency business are accelerating expansion to support the company's future high-quality and long-term development.
The bank continued to point out that the company's core performance is under short-term pressure, achieving revenue and net income attributable to shareholders of 181.09 billion and 12.85 billion yuan in 2023, respectively, a year-on-year decrease of -27.8% and -47.3%. The short-term pressure on performance is mainly due to the decline in revenue from real estate development business. The company's business structure continues to be optimized. From 2018 to 2023, the proportion of revenue from operation and service business has been continuously increasing. In 2023, the revenue from operation and service business was 24.88 billion yuan, a year-on-year increase of 5.7%, with a 25% compound annual growth rate over 5 years. Revenue contribution ratio is 13.8%, an increase of 7.7 percentage points compared to 2018.
The bank expects the company's revenue for 2024-2026 to be 158.04 billion, 153.3 billion, and 149.14 billion yuan, with year-on-year growth rates of -12.6%, -3.0%, and -2.7%, respectively; net income attributable to shareholders to be 10.84 billion, 12.11 billion, and 13.18 billion yuan; diluted EPS to be 1.57, 1.76, and 1.92 yuan, with corresponding PEs of 6.8, 6.1, and 5.6 times. Initial coverage is a "buy" rating.
