The company achieved revenue of 76.8 billion yuan in 2022 and a net loss attributable to the company's shareholders of 10.9 billion yuan. Various factors have caused the company's business losses, including the total impairment of the company's inventory, fixed assets, investment real estate, etc. of about 12.7 billion yuan. The pandemic has also caused a decline in the gross margin of the travel business.
Business losses are not only the result of operating challenges in 2022; they are also an accumulation of historical issues. Over a long period of time in the past, the company's tourism and cultural brands have deteriorated, the relative competitiveness of scenic spots and theme parks has weakened, while real estate development is not economical on a large scale, and the quality of land acquisition is average. Over the past few years, the company has been able to rely on early land reserves to continuously release performance. However, the distribution area of real estate projects went from focusing on major cities such as Shenzhen, Beijing, and Shanghai in the early years; from trying to target international companies such as Disney in the early years, the tourism and culture business had no obvious advantage compared to domestic peers. We believe that this negative trend is related to the fact that the company's management once focused on large-scale growth, not paying enough attention to economic benefits, and is also related to the extensive business content of regional companies.
If a regional company must not only balance real estate development, but also commit to Happy Valley operations, and develop businesses such as commerce and hotels, it is indeed easy to lose sight of the other. Therefore, we believe that the company's loss of performance in 2022 was not only a result of the impact of the 2022 pandemic on the tourism and cultural business, as well as the inefficient operation of the real estate market, but also the result of the company's accumulation of problems over time.
Organizational change requires benefits from marketization. In 2022, Mr. Zhang Zhengao became the company's chairman and party committee secretary.
Since then, the company has carried out in-depth professional integration, lean management, and headquarters capacity building. Specialized lines such as real estate, theme parks, hotels, and commerce have been sorted out more clearly, the management and integration of inventory in operation projects has been fully completed, headquarters control has been significantly strengthened, and the company is gradually moving from rapid growth to qualitative growth. The company emphasizes facing the market, strengthening the tourism business, and creating a market-oriented real estate business, which is expected to open up a new situation for the company's development.
Under unfavorable operating conditions, operating cash flow remained balanced, and credit remained stable. There were objective challenges in 2022, but the net cash flow outflow from the company's operating activities was only 600 million yuan, and the company basically maintained the volume of income and production based on sales. According to our estimates, the company's interest-bearing debt in 2022 was 116.5 billion yuan, down 6% from 2021, and the financing cost range was 2%-7.2%, maintaining stable credit and relatively smooth financing channels. This is the reporting basis for the company's future growth.
Risk warning: The operation and management efficiency of some of the company's assets still needs to be improved. There is a risk that traffic in some scenic spots is insufficient, and sales of commercial projects are low. Some of the company's real estate projects are located in an average area, and there may be a risk of pressure to remove them.
Profit forecasting, valuation and ratings. In 2023, we expect the company to maintain a reasonable pace of development, that is, reasonable sales removal and land acquisition expansion, and improve the quality of operation management. The company has announced its intention to issue convertible bonds in a targeted manner, which also shows the company's positive and promising attitude. However, the company's 2022 contract liabilities declined markedly, and the projects to be settled in 2023 were still mainly upfront sales. Based on the current pattern of the real estate market and travel market, we gave the company an EPS forecast of 0.17/0.51/0.92 yuan for 2023/24/25 without considering the impact of the company's targeted issuance of convertible bonds (the original forecast was 0.62/0.67 yuan for 2023/2024).
Referring to the market expectations of comparable companies such as China Merchants Shekou and Lujiazui, considering that the company's short-term performance is indeed in a climbing period, we gave the company a PB level of 0.7 times in 2023, that is, a target price of 6 yuan/share. Currently, the company's stock price is 4.83 yuan/share, and we give the company a “buy” investment rating.