2023 Annual Report Review: Revenue declined due to a decrease in the scale of real estate carry-over. In 2023, the company achieved operating income of 98.125 billion yuan, -18.37% year-on-year; realized net profit to mother of 888 million yuan, -85.48% year-on-year. Affected by the market downturn, by the end of 2023, the company's real estate project settlement area was 4.863,400 square meters, -21.13% YoY; settlement revenue was 85.469 billion yuan, -21.72% YoY, and the gross margin for real estate business settlement was 16.16%.
Financing costs have continued to decline, and the bottom line of financial security has been maintained. As of the end of 2023, the company held monetary capital of 29.74 billion yuan and total interest-bearing liabilities of RMB 91.906 billion, or -20.2% year-on-year, of which bank loans accounted for 75.52% and open market financing accounted for 24.48%. Furthermore, the company continued to maintain a reasonable level of debt size and financing costs. As of December 31, 2023, the company's balance ratio was 68.7%, the balance ratio after excluding advance payments was 61.3%, the net debt ratio was 53.2%, and the weighted average cost of debt financing fell further to 4.36%.
The sales scale maintains the first tier in the industry and supplements high-quality soil storage in an orderly manner. As of December 31, 2023, the company has achieved a contract amount of 153.55 billion yuan, sales performance remains at the top of the industry, and has delivered more than 113,000 high-quality housing units; the annual construction area is about 3.13 million square meters, and the completed area is about 13.43 million square meters. In 2023, the company insisted on deep-cultivating high-energy cities, raising investment standards, and optimizing the allocation of investment resources. In core cities such as Shanghai, Hangzhou, Nanjing, and Xi'an, the company added a total of about 950,000 square meters of land reserves, with a total investment of about 12.5 billion yuan. By the end of 2023, the company's total land reserves were about 41 million square meters, and equity land reserves were about 18 million square meters, of which Tier 1 and 2 cities accounted for about 73%.
Diversified businesses maintain high-quality development. As of the end of 2023, Jindi's smart service contract managed an area of about 391 million square meters, of which the management area was about 231 million square meters. In 2023, Jindi Group's contract construction business continued to maintain high-quality growth, with 57 cities across the country, with more than 190 management service projects; the cumulative contract management area exceeded 28.7 million square meters, of which the total contract management area for residential projects exceeded 19.51 million square meters, the cumulative contract management area for commercial projects exceeded 3.25 million square meters, and the total contract management area for government public construction projects exceeded 5.94 million square meters; the cumulative contract value for residential projects exceeded 239.9 billion yuan, and the total contract management investment scale for commercial projects exceeded 74.2 billion yuan.
Investment advice: Maintain an “better than the market” rating. As the rate of decline in industry prices and sales in 2023 exceeded expectations, the company's calculation impairment and cost conversion, etc., resulting in a large short-term decline in short-term settlement profit margins.
We believe that the company's current net profit does not reflect future potential profit changes. Considering policy efforts, asset prices are gradually finding a bottom. There is room for asset price restoration in the future. Using the PB method of valuation is more in line with current market changes. We predict that the company's EPS in 2024 will be 0.22 yuan, net assets per share will be 14.63 yuan, and the corresponding reasonable value range will be 0.35 to 0.40 times PB, corresponding to a reasonable value range of 5.12-5.85 yuan per share. Risk warning: 1) Sales and settlement fall short of expectations; 2) The industry faces downside risks.