受交付体量较上年同期减少及交付项目本身毛利下降影响，上半年公司营业收入与利润均同比下滑。上半年结算毛利率约9.6%，较2023 年同期下滑8.7pcts，主要原因是报告期内结算的项目主要为2020 年、2021 年获得的项目，因自持、拿地溢价率高等原因导致毛利率较低，但随着2022 年前获取的项目逐渐结转完成，叠加公司在杭州的强成本控制能力、高运营效率、好口碑，预计毛利率有望逐渐修复。Matters:
In the first half of 2024, the company achieved operating income of 24.201 billion yuan, a year-on-year decrease of 10.46%; realized net profit to mother of 1.166 billion yuan, a year-on-year decrease of 28.74%.
Commentary:
The company's revenue and profit declined year-on-year in the first half of the year due to a decrease in delivery volume compared to the same period last year and the decline in gross profit of the delivery project itself. The gross margin settled in the first half of the year was about 9.6%, down 8.7pcts from the same period in 2023. The main reason is that the projects settled during the reporting period were mainly projects obtained in 2020 and 2021. The gross margin was low due to high self-ownership and land acquisition premiums, but as the projects obtained before 2022 were gradually carried over, compounded by the company's strong cost control capabilities, high operating efficiency, and good reputation in Hangzhou, the gross margin is expected to gradually recover.
Affected by the downturn in the real estate market in Hangzhou, the company's sales volume fell 37% year on year in the first half of the year, with sales in Hangzhou falling 58% year on year. 1) In the first half of the year, the company achieved sales volume of 58.23 billion yuan, a year-on-year decrease of 37%. The main reason was the decline in the real estate market in Hangzhou and the slowdown in project elimination. In the first half of 2024, the company's sales amount in Hangzhou was 31 billion yuan, down 58% year on year. 2) The company's sales target for 2024 is over 100 billion yuan. With the opening of new land acquisition projects in the first half of the year, it is expected to achieve the annual sales target.
In the first half of the year, the company focused its investment on its base in Hangzhou, adding 0.875 million square meters of land reserves, and still maintained a high investment intensity (38%). 1) In the first half of the year, the company added 10 new land reserve projects, all located in Hangzhou, with a planned construction area of 0.875 million square meters, a total land price of 22.3 billion yuan, an investment intensity of about 38%, and an equity land price of 11.2 billion yuan, with an equity ratio of 50%. 2) By the end of June, Hangzhou accounted for 66% of the company's land reserves, 25% of second-tier and third-tier cities with a solid economic foundation in Zhejiang Province, and 9% outside Zhejiang Province. Hangzhou's share of land storage had further increased, which helped the company to continue to develop its management and brand advantages.
Cash is plentiful, and the cost of comprehensive financing continues to fall. 1) As of the end of June, the company's equity liabilities were 34.4 billion yuan, and the amount of interest-bearing debt was 39.9 billion yuan, of which bank loans accounted for 79.5% and direct financing accounted for 20.5%. Short-term debt is about 10.8 billion yuan, accounting for only 27%, and the short-term cash debt ratio is 2.46 times, which can effectively cover short-term debt. 2) By the end of June, the company's comprehensive financing cost was 3.7%, a further decrease of 0.5 pcts from the end of 2023.
Investment advice: The company has been deeply involved in Hangzhou for many years and has been transformed into a brand, operation and cost moat to support the company to create differentiated products, enhance profitability, and help improve future profit margins. Considering that the current volume and price of the real estate market is still facing some downward pressure, we adjusted the company's 2024-2026 EPS forecast to 0.85, 1.11, and 1.17 yuan (0.99, 1.33, and 1.48 yuan, respectively). The company has established a clear competitive advantage in Hangzhou. It is expected that it can maintain a high level of ROE in the medium to long term, give a 10% valuation premium on the remaining income model, and give the company a target price of 10 yuan for 2024, corresponding to 12 times PE in 2024, maintaining the “recommended” rating.
Risk warning: The industry continues to shrink unilaterally, and the market is declining beyond expectations.
