Incident: Huafa Co., Ltd. released the 2024 semi-annual results report. 24 In the first half of the year, the company achieved revenue of 100 million yuan; net profit of 1.26 billion yuan to mother.
Persist in de-diversification as the core, and steadily improve sales rankings. In the first half of the year, with sales elimination as the core, the company achieved sales of 45.2 billion yuan, ranking 11th in the sales list of Clarisse, an increase of 3 places over 2023.
Among them, the Zhuhai region completed sales of 12.025 billion yuan, accounting for 26.6% of sales; the South China region completed sales of 16.049 billion yuan, accounting for 35.5% of sales; the East China region completed sales of 16.234 billion yuan, accounting for 35.9% of sales; and the northern region completed sales of 0.891 billion yuan, accounting for 2.0% of sales.
Optimize the debt structure and strengthen fund control. ① By the end of the first half of the year, the company excluded the balance ratio, down 109 BP from the end of 2023; ② The share of long-term interest-bearing debt remained above 80%, and continued to maintain a steady balance and liability structure; ③ Continuously strengthen financial control and optimize financing costs, and comprehensive financing costs in the first half of the year were 5.13%, down 35 BP from 2023; ④ Successfully implemented innovative CCI-Huajin-Huafa Consumer Infrastructure Pre-REITS2.125 billion; ⑤ Maintaining high-quality credit fundamentals, 2024 principal and debt The rating results are maintained at AAA.
Refined management has achieved remarkable results, and management rates have been greatly optimized. The company continues to make efforts in organizational structure, team building, digital intelligence empowerment, risk prevention and control, etc., to continuously improve the level of internal control. The management expense ratio for the first half of the year was 2.28%, a year-on-year decrease of 44BP. During the reporting period, the company completed the organizational structure plan update, implemented a normalized management mechanism for the establishment and adjustment of the organizational structure to ensure clear rights and responsibilities; introduced a new talent team from within, systematically introduced outstanding talents in leading management and key positions, and implemented the “Mountain and Sea Plan” to promote the growth of young talents.
The company publishes its trade-in platform to the Group at an affordable price, and there is plenty of room for improvement in reporting. On July 30, Huafa Co., Ltd. plans to transfer the existing real estate under the name of Huaben to Zhuhai Anju Group Co., Ltd. (a wholly-owned subsidiary of Huafa Group) by transferring 100% of the shares of its wholly-owned subsidiary, Zhuhai Huaben Investment Co., Ltd., at a transfer price of RMB 0.266 billion. Huaben Investment is mainly engaged in the acquisition of trade-in properties. Up to now, Huaben has acquired a total of 79 residential properties, and the latest audited net assets are 0.265 billion. This transaction enabled Huafa Co., Ltd. to sell its trade-in platform to the group's parent company at an affordable price, paving the way for future active participation in collection and storage work. As a listed developer under the Zhuhai state-owned Huafa Group, Huafa Co., Ltd. will carry out collection and storage business with the parent company, and the cash flow and balance and liability structure will be significantly improved at the reporting level.
Profit forecasting and valuation: The company's sales ranking will rise steadily, the debt structure will continue to be optimized, and the cash flow and balance structure will be significantly improved with shareholders. We expect the company's revenue for 24-26 to be 68.24, 71.27, and 75.63 billion yuan, respectively, and net profit of 15.9, 16.7 billion yuan to mother, corresponding PE of 9.6, 9.1, and 8.7 times, respectively, maintaining the “recommended” rating.
Risk warning: The real estate market continues to be sluggish; policy implementation falls short of expectations; rate control is not effective.