Settlement shrinks performance losses and maintains “holding” rating
On April 29, Jindi Group released its quarterly report for the year 24, achieving annual revenue of 6.96 billion yuan (yoy -51.5%) and net profit to mother of 280 million yuan (yoy -154.4%). We maintain the company's 2024-2026 EPS profit forecast of 0.20/0.20/0.21, respectively. Comparable to the 2024 Wind, the average PB was expected to be 0.39 times. Due to the high pressure on the company's short-term debt, the company was given 0.26 times PB in 2024, with a target price of 3.80 yuan (previous value of 4.38 yuan), maintaining a “holding” rating.
Losses due to shrinking settlement scale and increased costs
The contraction in the company's settlement volume during the period led to a 51.5% decline in revenue. As the center of market profit margins declined, the company's gross margin declined further. The company's gross margin fell 2.6 pct year on year to 14.9% during the period. At the same time, expenses for the period were rigid, and the sales and management financial expense ratios for the period reached 4.7%/10.3% respectively, an increase of 1.5/4.4 pct over the previous year. Furthermore, due to pressure on cash flow, financial expenses during the period reached 530 million yuan, +113% over the same period. Overall, the contraction in revenue combined with the increase in costs and expenses led to the first loss since listing during the period.
Sales declined year over year, and completed delivery increased year over year
The company's new construction area was 278,000 square meters during the period, or -52% compared to the same period, and the annual plan completion rate reached 15.2%. The value of new products has declined, so the scale of sales has also shrunk. The company signed a contract amount of 16.73 billion yuan during the period, with a contract area of 984,000 square meters, -62.1%/-59.5% year-on-year, respectively. In terms of investment and development, the company stopped acquiring land in September 2023 and continued until the first quarter of 2024. The company's development business focuses on the completion and delivery process.
The completed area during the period reached 1.449 million square meters, +8% over the same period, and the annual planned completion rate was 13.5%. The overall development business contracted. At the stage of industry bottoming out, the company preserved development potential by transforming into real estate-related industries such as property management, property leasing, and construction on the basis of ensuring safety.
The pressure on interest-bearing debt continues to fall, and stocks are being revitalized to cope with financial pressure
The company's net debt ratio and balance ratio after deducting advance accounts are in line with the “three red lines” standard. In the case of shrinking sales payments, the pressure on short-term debt is still quite obvious, and the short-term cash debt ratio is about 0.6. However, the amount of interest-bearing debt maturing within one year was about 38.6 billion, down 2.4 billion from the end of 2023. By the end of the period, the company's interest-bearing debt was about 89.3 billion yuan, a year-on-year pressure drop of 28.7 billion, further deleveraging compared to the end of 2023. This year's Q2-Q4 repayment peaks from May to June (3.5 billion) and end of the year from November to December (3 billion). The company faced some financial pressure during the downturn in the industry boom cycle, but it was also revitalizing its stock to respond positively.
Risk warning: Risk of declining industry sales; falling bond prices put pressure on the company's cash flow.