(1) Asset impairment preparations continued to be calculated in the third quarter on the basis of the interim report. The cumulative impairment of 3.4 billion yuan was recorded in the first three quarters, continuing the company's relatively sufficient depreciation characteristics; net profit due to mother in the first three quarters was 3.4 billion yuan, a decrease of 3.5 billion yuan from 0.06 billion yuan in the same period last year, a year-on-year decrease of 5978%; (2) The sales scale fell 57% year on year, weaker than the top 100, and no new projects were acquired in the first three quarters; pay attention to the possibility and process of restructuring the investment cycle after subsequent companies' open market repayment pressure declined; (3) In terms of public debt, since this year, the company has paid interest as scheduled. The total payment of domestic and foreign public debt was nearly 18 billion yuan in the first three quarters. There are only two November and December medium-term notes (1.6 billion yuan each in principal and interest) to be repaid in the next year. After February next year, the company's debt repayment pressure may decrease significantly. It can be observed that the pressure on the open market will decrease in February next year. Looking back, considering that the company's investment strength continues to shrink, the total volume and structure of the company's subsequent sales may put some pressure on sales. Equity risk premium repair due to credit repair is expected to be -0.90/-0.46/0.06 yuan in 2024/2025/2026, respectively, and P/B 0.45/0.47/0.47 times, respectively, giving a “gain” rating.

q (1) Asset impairment preparations continued to be calculated in the third quarter on the basis of the interim report. The cumulative impairment of 3.4 billion yuan was recorded in the first three quarters, continuing the company's relatively sufficient depreciation characteristics; net profit due to mother for the first three quarters was 3.4 billion yuan, a decrease of 3.5 billion yuan from 0.06 billion yuan in the same period last year, a year-on-year decrease of 5978%.

The company's 24Q1-Q3 revenue/operating profit/net profit to mother was 41 billion/-4.9 billion/-3.4 billion, respectively, -21.6%/-344.9%/-5978.0% year-on-year, respectively. (i) The company's revenue showed negative growth in the first three quarters, mainly due to a decrease in real estate business settlement revenue, which lags reflecting the decline in the company's sales scale in the past; (ii) the year-on-year growth rate of operating profit in the first three quarters of the first three quarters of 24 fell 4.4 PCT to 12.5% compared to the same period in 23, and the three rates increased 1.7 PCT to 11.8% compared to the same period in 23 (the sales/management/finance expense ratios were +0.0 PCT/-0.2 PCT/+1.9 PCT to 3.2% for the same period in 23, respectively) /4.9%/3.7%), net investment income (-1.3 billion yuan) decreased by 1.7 billion yuan compared to the same period in '23, asset impairment losses (2.4 billion yuan) increased by 1.5 billion yuan over the same period in '23, and credit impairment losses (1 billion yuan) increased 0.4 billion yuan over the same period in '23. The decline in gross margin, increase in financial rates, decrease in investment income, and increase in impairment caused the company's operating profit to grow lower than revenue; (iii) the year-on-year growth rate of the company's operating profit was lower than revenue; (iii) it returned in the first three quarters The growth rate of parent net profit was lower than operating profit: mainly due to the increase in the settlement equity ratio in the case of loss (the ratio of net profit to net profit increased 60.7 PCT to 69.3% in the first three quarters of 24 compared to the same period of 23), while the decrease in income tax expenses (income tax expenses decreased by 1.3 billion yuan to 0.1 billion yuan in the first three quarters of 24 compared to the same period in 23 years), which created a certain hedging effect.

Looking forward to the future, the company plans to start a new construction of 0.95 million square meters for the full year of '24 (down 69.6% from the actual completion amount in '23), and the company's contract debt of $57.3 billion as of the end of September '24 (down 13.0% from the end of '23) guarantees 0.58 (lower than 0.67 in '23). Also, considering the downward pressure on housing prices in the past three years, etc., the company is judged Subsequent performance may still be under pressure.

q (2) The sales scale fell 57% year on year, weaker than the top 100. No new projects were acquired in the first three quarters; focus on the possibility and process of restructuring the investment cycle after subsequent open market repayment pressure for subsequent companies declined.

In terms of sales, the company's full-caliber cumulative sales area in the first three quarters was 3.59 million square meters (-46.3% YoY); the cumulative sales volume of full-caliber was 52.8 billion yuan (-56.7% YoY), ranking 14th in the Kerry industry ranking (same as 24H1, down 4 places from the whole year), and the year-on-year growth rate (-56.7%) was lower than that of the top 100 real estate companies (-38.6%); the corresponding average sales price was 0.0147 million yuan/square (-19.4% YoY).

In terms of land acquisition and land storage, the company did not invest in new land in the first three quarters. The latest (as of the end of June '24), the company's total land reserves are 35.89 million square meters, and equity land reserves are 15.99 million square meters.

Looking back, considering that the company's investment strength continues to shrink, the total volume and structure of subsequent companies may put some pressure on sales, and pay attention to the possibility and process of restructuring the investment cycle after the subsequent open market repayment pressure falls.

q (3) On the financial side, cash on book has shrunk further; in terms of public debt, the company has paid interest as scheduled since this year, and only about 3.1 billion yuan remains to be repaid during the next year. The pressure on the company to repay its debts may decrease significantly after February next year.

On the financial side, as of the end of September '24, the company's monetary capital was 22.7 billion yuan (down 1.8% from the middle of this year), and the estimated interest-bearing debt on the book was 178.4 billion yuan (down 4.5% from the middle of this year).

In terms of public debt, the company's past public bonds have all been paid interest normally. In the first three quarters of this year, the company has repaid a total of nearly 18 billion yuan of domestic and foreign public bonds (including US dollar bonds equivalent to RMB 3.4 billion due in August this year); in terms of stock debt, the company has no surviving foreign bonds. As of October 31, 2024, the company's cash flow to be repaid for 2024/2025/2026 was 3.1/2.4/0.5 billion yuan, respectively (according to the enforcement scale, same below); Looking at the cash flow (principal plus interest) situation, in 2024, there are only 1.6/1.6 billion yuan to be repaid in November/December, 2025 is mainly 1.8 billion yuan in February, 2026 is mainly 0.5 billion yuan in April, and there will be no public debt after May 2026. If the company successfully pays the remaining bonds from the end of the year until February 23 next year, the debt repayment pressure may be significantly reduced, and the open market debt repayment schedule may gradually become clear, and conditions are in place to drive the improvement of the entity's credit expectations.

Investment suggestions: (1) Asset impairment preparations continued to be calculated on the basis of the interim report in the third quarter, continuing the company's relatively adequate depreciation characteristics of 3.4 billion yuan in the first three quarters; net profit due to mother in the first three quarters - 3.4 billion yuan, a decrease of 3.5 billion yuan from 0.06 billion yuan in the same period last year, a year-on-year decrease of 5978%; (2) sales volume fell 57% year on year, weaker than the top 100. No new projects were acquired in the first three quarters; focus on restructuring the investment cycle after subsequent companies' open market repayment pressure declined Probability and process; (3) In terms of public debt, the company has paid interest as scheduled since this year, with a cumulative total of nearly 18 billion yuan of domestic and foreign public debt payments in the first three quarters. In the next year, only two medium-term notes (1.6 billion yuan in principal and interest) remain to be repaid in November and December. After February next year, the company's debt repayment pressure may decrease significantly. It can be observed that the open market pressure will decrease in February next year. Looking back, considering that the company's investment strength continues to shrink, the total volume and structure of the company's subsequent sales may put some pressure on sales. Equity risk premium repair due to credit repair is expected to be -0.90/-0.46/0.06 yuan in 2024/2025/2026, respectively, and P/B 0.45/0.47/0.47 times, respectively, giving a “gain” rating.

q Risk Warning: Sales growth falls short of expectations, settlement falls short of expectations, gross margin falls short of expectations, debt payments fall short of expectations, uncertainty in equity structure, impairment exceeds expectations, incremental financing falls short of expectations, decline in asset quality exceeds expectations, etc.