Shareholders help nationalize development, and the company can be expected to grow collaboratively with multiple businesses as the only platform for real estate development and comprehensive urban operation business under China Power Construction. Its main business includes commercial and urban operations, and its business layout has covered many key core cities across the country, such as Beijing, Shenzhen, Guangzhou, and Wuhan. We expect the company's revenue for 2024-2026 to be 4.8, 4.79, and 6.7 billion yuan, respectively, with year-on-year growth rates of 353.5%, -0.2%, and 39.7%; net profit to mother of -0.62, -0.35, and 0.05 billion yuan, respectively, with year-on-year growth rates of 63.4%, 44.2%, and 115.6%, respectively; diluted EPS is -0.36, -0.20, and 0.03 yuan respectively. The current stock price corresponds to PE -5.9, -10.6, and 68.2 times. In the future, the company's performance is expected to improve as new real estate projects are carried over and commercial operations are improved. For the first time, the company's performance is expected to be given an “increase in wealth” rating.

Improve the quality and efficiency of commercial operations, explore the “investment, finance, construction and management withdrawal” business closed loop companies operating 20 projects by the end of 2023, with an operating area of 1.19 million square meters, an increase of 4.3% over the previous year, and an average occupancy rate of 78.0%, an increase of 3.7 pcts over the previous year. In November 2023, the “CITIC Construction Investment - Power Construction Nanguo Tanhualin Asset Support Special Program” was successfully established on the Shenzhen Stock Exchange. It was a renewal of the company's first single REITs in 2022, with an issuance scale of 1.846 billion yuan. This project is the first REITs product issued on a rolling basis by a central enterprise in the market. In the future, the company will further study the asset securitization exit path for hold-type operation projects and actively revitalize existing assets.

The city's operation relies on shareholder advantages, and the business situation has improved

By the end of 2023, the company had 10 operating projects, with an operating area of 0.22 million square meters, up 47.8% year on year. The average occupancy rate was 77.2%, up 3.3 pct year on year. It covers industrial parks, hotels, office buildings, long-term rental apartments, etc. The company's Happy Life Apartments have been located in Shanghai, Chengdu and Hangzhou, with an operating area of 0.04 million square meters and an overall occupancy rate of 76%. It has won many awards such as “2023 Long-term Rental Apartment Model Brand of the Year”.

Real estate investment is operating steadily, and future carry-over results can be expected

In 2023, the company's sales area was 0.414 million square meters, with sales volume of 8.07 billion yuan, up 41.2% and 12.6% year-on-year respectively.

If you consider the value of goods that have already started construction and have not been sold, based on the company's sales area in 2023, the total remaining value of the company can meet sales requirements for at least 2 years. At the same time, the Beijing Fengfan, Shenzhen Qianhai Runfengfu, and Xi'an Longyue Changan projects are the company's main carry-over projects in 2024. The total uncarried amount (equity) of the three projects sold is 4.96 billion yuan.

Risk warning: The intensity of land acquisition falls short of expectations, the project carry-over situation falls short of expectations, and policy regulation falls short of expectations.