Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The real estate market continues to show signs of weak recovery, with sales data in May indicating a slight improvement compared to April [8] - The overall sales area of commercial housing in the first five months of 2025 decreased by 2.9% year-on-year, with sales amounting to 3.41 trillion yuan, down 3.8% year-on-year [5][14] - The new housing market is expected to maintain a weak recovery trend in June, driven by increased marketing efforts from real estate companies and a rise in supply [32] Summary by Sections Sales Data - In the first five months of 2025, the national commercial housing sales area was 353 million square meters, with a year-on-year decrease of 2.9% [5][14] - The sales area in May alone saw a year-on-year decline of 3.3%, while the sales amount dropped by 6.0% [5][14] - The average sales price in May decreased by 2.8% year-on-year but increased by 2.5% month-on-month, indicating a trend of price adjustments [5][14] Construction Data - The new housing starts in the first five months of 2025 totaled 232 million square meters, down 22.8% year-on-year [6][21] - The completion area for housing was 184 million square meters, reflecting a year-on-year decline of 17.3% [6][21] Investment Trends - Real estate development investment in the first five months of 2025 reached 3.62 trillion yuan, down 10.7% year-on-year [7][24] - The funding available to real estate developers decreased by 5.3% year-on-year, with various funding sources showing significant declines [28][29] Investment Recommendations - Recommended stocks include strong credit real estate companies that understand customer demand, such as Greentown China, China Overseas Development, and China Merchants Shekou [32] - Companies benefiting from both real estate recovery and consumption promotion policies include China Resources Land and Longfor Group [32]

Core Viewpoint - The report from Guolian Minsheng Securities highlights the importance of the current housing sales model in the real estate sector, predicting that various regions will gradually implement pilot policies and supporting measures for current housing sales, which can help stabilize housing prices and mitigate delivery risks [1] Group 1: Institutional Changes - The evolution of China's housing system has transitioned through three stages: "welfare housing - pre-sale of commercial housing - pilot current housing sales." The pre-sale system has effectively addressed housing shortages and financing challenges, supporting long-term rapid development of the real estate industry [1] - The shift in policy focus towards "ensuring delivery and preventing risks" has led to the gradual promotion of the current housing sales system, with 6 provinces and 32 cities already issuing relevant details since 2024 [1] Group 2: Current Status - Since 2021, the proportion of current housing sales in the total sales area of commercial residential properties has been on the rise, reaching 32.7% in Q1 2025, an increase of 22.5 percentage points from the low point in 2020 [3] - Several regions have introduced measures to support current housing sales, including financing support, tax reductions, and simplified approval processes, with expectations for further measures to encourage current housing sales [3] Group 3: Impact of Current Housing Sales - Current housing sales are expected to delay the conversion of land to housing, reducing new supply and stabilizing housing prices, particularly in lower-tier cities with longer inventory digestion periods [4] - The current housing sales model may lead to a decrease in land auction enthusiasm and a decline in land prices, prompting developers to consider thicker safety margins when acquiring land [4] - The model requires higher product quality, operational efficiency, and financing capabilities from developers, potentially accelerating industry consolidation [4]

Group 1 - Vanke received a low-interest loan of 1.552 billion yuan from Shenzhen Metro Group, with a term of 36 months and an annual interest rate of 2.34%, which is lower than the 1-year LPR [1] - The loan is intended for repaying company bond principal and interest, and the repayment method involves semi-annual payments of 0.5% and a final payment of 97% [1] - This transaction reflects increased trust from state-owned capital in Vanke and signals a proactive approach by Shenzhen state-owned enterprises to stabilize real estate companies through market mechanisms [1] Group 2 - M.K. Long announced that its general manager, Che Jianxing, is under investigation by the Yunnan Provincial Supervisory Committee, but the company remains operationally stable with other executives continuing their duties [2] - Concerns about governance risks may rise due to Che's investigation, especially as the company has faced declining performance and previous internal control issues [2] - The board is functioning normally, with the chairman temporarily assuming the general manager's responsibilities [2] Group 3 - New City Joy Service appointed an independent investigation consultant to examine 800 million yuan in financial transactions with related parties that were not recorded in the company's financial statements [3] - The company has repaid all financial assistance provided to related parties as of December 31, 2024, with no outstanding balances [3] - This incident may undermine investor confidence, particularly as the company faces liquidity management challenges and potential regulatory penalties if violations are confirmed [3] Group 4 - Huafa Co. announced a supply chain asset special plan with a total amount not exceeding 20 billion yuan to optimize its asset-liability structure and improve capital efficiency [4] - The plan will use accounts receivable as the underlying assets and will have a maximum issuance period of 1 year, with interest rates determined based on market conditions [4] - This initiative aims to alleviate short-term liquidity pressure and may signal a shift in the industry from high-leverage expansion to asset operation optimization [4] Group 5 - Jianfa International announced the resignation of non-executive directors Huang Wenzhou and Zheng Yongda for personal reasons, with Xu Xiaoxi appointed as a new non-executive director [5][6] - Xu's appointment may enhance governance effectiveness, and his non-remunerated position signals a commitment to responsibility, potentially increasing investor confidence in state-led enterprises [6] - Attention is needed on how board changes may affect strategic continuity, especially amid ongoing liquidity pressures in the real estate sector [6]

Financial Performance - The Group achieved operating revenue of approximately CNY 142.99 billion for the year, representing a year-on-year increase of about 6.4% compared to CNY 134.43 billion in 2023[19]. - The profit attributable to the owners of the Group for the year was approximately CNY 4.80 billion, a decrease of about 4.6% from CNY 5.03 billion in 2023[19]. - The Group's revenue for the year was approximately RMB 142,986.28 million, representing a year-on-year increase of approximately RMB 8,556.31 million (approximately 6.4%) compared to the previous financial year[77]. - The gross profit of the Group amounted to approximately RMB 18,972.44 million, an increase of approximately RMB 4,055.98 million (approximately 27.2%) compared to the previous financial year[77]. - Revenue from property development business was approximately RMB 138,623.49 million, accounting for approximately 96.95% of the Group's total revenue for the year[80]. - Revenue from property management and other related services amounted to approximately RMB 4,362.80 million in 2024, representing an increase of approximately RMB 64.73 million or 1.5% compared to the previous year[101]. - The total gross floor area of delivered properties was approximately 6.99 million sq.m., representing a decrease of approximately 1.53 million sq.m. compared to the previous financial year[80]. - The cumulative contracted sales attributable to shareholders for the year amounted to approximately RMB 103.36 billion, representing a decrease of about 25.1% compared to the previous financial year[85][86]. - The total sales amount for 2024 reached RMB 10.34 billion, with a total GFA sold of 5,048,089 sq.m., compared to RMB 13.80 billion and 6,664,348 sq.m. in 2023[90]. Market Conditions - The real estate industry faced significant challenges in 2024, with macroeconomic adjustments leading to a cautious investment sentiment among customers[15]. - The central government introduced various accommodative fiscal and monetary policies in 2024, which helped stabilize the property market by the fourth quarter[16]. - There is a structural shift in demand within the real estate sector, with customers increasingly prioritizing housing quality, location, and supporting facilities[17]. - Competition in the real estate market has diversified, now including technology, supply chain, and data competition, alongside traditional product and brand competition[18]. - The demand for improved housing in core areas has become the dominant trend in the market[17]. - The real estate industry in 2024 faced immense challenges, but signs of stabilization began to emerge in the fourth quarter due to supportive policies[73]. Asset Management - As of December 31, 2024, the total assets of the Group amounted to approximately CNY 412.48 billion, with cash and cash equivalents of about CNY 57.26 billion and inventory of approximately CNY 247.03 billion, indicating a healthy asset structure[19]. - The Group's total cash collection from sales was approximately RMB 135.74 billion, with a cash collection ratio of 102%[27]. - As of December 31, 2024, the salable value of the Group's total land reserves was approximately RMB 221.0 billion, with land reserves acquired after 2022 accounting for approximately 80%[31]. - The land reserves as of December 31, 2024, totaled approximately 12.43 million sq.m., with 311 projects across China[91]. - The Group's bank loans were secured by investment properties with a fair value of approximately RMB 623 million and properties under development valued at approximately RMB 46,440.12 million as of December 31, 2024[139]. Strategic Initiatives - The Group plans to increase R&D investment in 2025, focusing on product upgrades and revitalizing unsold inventory[55]. - The Group will expedite the development of centralized procurement platforms to reduce costs and improve operational efficiency[59]. - The Group aims to optimize its organizational structure to enhance efficiency and empower talent, ensuring sustained organizational development and innovation[65]. - The Group will enhance its investment capabilities by closely monitoring market dynamics and focusing on key cities for project development[63]. - The Group will actively explore new channels for securing premium project opportunities to diversify its investment portfolio[170]. - The Group will deepen collaboration with big data intelligence platforms for efficient resource integration and utilization[166]. Leadership and Governance - Mr. Lin was appointed as the CEO of the Company from March 21, 2019, to March 26, 2025[176]. - Mr. Tian joined C&D Real Estate in 2012 and was appointed as the CEO effective March 26, 2025[178]. - Ms. Zhao has over 30 years of financial management experience and was appointed as the chairperson of the Board from August 25, 2022, to March 26, 2025[183]. - The Company has a strong leadership team with extensive experience in finance and real estate management[180]. - Mr. Wong Chi Wai has over 33 years of experience in the accountancy profession and is a practicing certified public accountant in Hong Kong[199].

Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [2][18]. Core Views - The company achieved a total revenue of 142.99 billion yuan in 2024, representing a year-on-year increase of 6.4%, while the core net profit attributable to the parent company was 4.27 billion yuan, down 1.6% year-on-year [7]. - The property development business contributed 138.62 billion yuan to revenue, accounting for approximately 97% of total revenue, with a gross margin of 13.3% and a net profit margin of 3.4% in 2024 [7]. - The company maintained a high dividend payout ratio of over 50%, proposing a final dividend of 1.2 HKD per share, resulting in a dividend yield of 7.4% based on the closing price on March 26, 2025 [7][18]. - The company ranked 7th in the sales performance among the top 100 real estate companies in 2024, with a total contract signing amount of 133.5 billion yuan [7]. - The company has a strong liquidity position with cash on hand amounting to 57.26 billion yuan and a net debt-to-equity ratio of approximately 31.78% [7]. Financial Data and Forecast - Total revenue is projected to grow from 134.43 billion yuan in 2023 to 142.99 billion yuan in 2024, with a compound annual growth rate (CAGR) of 6.4% [6]. - The net profit is expected to decrease slightly from 4.34 billion yuan in 2023 to 4.27 billion yuan in 2024, with a forecasted recovery to 4.72 billion yuan in 2025 [6]. - The company’s gross margin is expected to improve from 11.1% in 2023 to 13.27% in 2024, while the return on equity (ROE) is projected to decline from 13.0% to 11.36% [6][7]. - The estimated earnings per share (EPS) for 2025 is projected to be 2.34 yuan, with a price-to-earnings (PE) ratio of 8-10 times, leading to a reasonable market capitalization range of 41.2-51.5 billion HKD [18]. Market Performance - The company's stock closed at 16.42 HKD on April 1, with a 52-week price range of 10.06-19.58 HKD [2]. - The company’s absolute performance over the last month was a gain of 2.53%, while it underperformed the Hang Seng Index over the last two and three months [4].

Summary of the Conference Call for Jianfa International Group Company Overview - Jianfa International Group reported a stable overall performance in 2024, with revenue reaching 143 billion yuan, a year-on-year increase of 6% [3][4] - The net profit attributable to shareholders was 4.8 billion yuan, with a slight decline of 1.6% after deducting perpetual bond interest [3][4] - The gross profit margin improved from 11.1% in 2023 to 13.3% in 2024, attributed to the optimization of project structure and the transfer of more high-profit projects [3][4] Financial Performance - The company recognized a provision for impairment losses of 6 billion yuan in 2024, bringing the total impairment losses over the past four years to nearly 10 billion yuan, indicating a strong focus on asset health [3][4] - The interest-bearing debt rate decreased to 3.56%, with expectations for further decline in 2025 due to a reduction in borrowing rates from major shareholders [4][5] - Jianfa International maintained a stable debt structure and an active dividend policy, with a dividend of 1.2 HKD per share in 2024, resulting in a payout ratio of 52% [4][6] Land Reserves and Product Development - In 2024, Jianfa International acquired 23 plots of land with a total value of 100.7 billion yuan, increasing total land reserves to 221 billion yuan, with approximately 80% being new land [4][7] - The company emphasized product upgrades, launching several benchmark projects and planning to expand into more cities, achieving industry-leading customer satisfaction [4][7] Market Dynamics - The real estate market showed significant differentiation between cities, with first-tier and strong second-tier cities performing robustly [4][8][9] - Jianfa International aims to achieve a sales target of 150 billion yuan by optimizing sales strategies and leveraging existing resources while exploring new markets [4][8] - The company plans to maintain a supply volume of no less than 240 billion yuan in 2025, with a target sales rate of 65%-67% [4][10] Future Outlook - The gross profit margin is expected to remain stable due to the favorable project profit structure and prior impairment provisions [4][12][13] - The company is optimistic about its performance in 2025 and 2026, focusing on product structure optimization and pricing strategies for stable growth [4][13] - The company’s financial policies and substantial impairment provisions are anticipated to mitigate future profit margin pressures [4][14][15] Land Acquisition Strategy - The land market is experiencing low supply and transaction volumes, with rising premium rates. Jianfa International is utilizing competitive bidding and cooperative models for land acquisition [4][19] - The improvement in housing efficiency is significantly impacting the industry, with new regulations enhancing the livable space in new homes [4][18] Brand Development and Strategy - Jianfa International is focusing on brand building through flagship projects to enhance brand influence and market positioning [4][24][25] - The company aims to balance investment return stability with brand reputation through high-quality projects [4][25]

Investment Rating - The investment rating for the company is "Buy" with a target price of 19.29 HKD [7][8]. Core Views - The company reported a revenue of 143 billion RMB for 2024, a year-on-year increase of 6%, while the core net profit attributable to shareholders was 4.3 billion RMB, a slight decrease of 1.6% year-on-year. Despite being slightly below consensus expectations, the company has adequately provided for inventory impairment since 2021, and the current unsold resources are of high quality, indicating potential for performance stabilization in the future [1][2]. - The company’s revenue and gross profit margin for 2024 increased by 7% and 2.2 percentage points respectively, reaching 138.6 billion RMB and 13.3%. The decline in net profit is primarily due to a significant increase in inventory impairment losses and tax expenses [2][4]. - The company’s contract sales decreased by 25% year-on-year, aligning with industry trends, but it has improved its cash collection rate and sales equity ratio. The company has focused on optimizing land reserves, with 98% of new land acquisitions concentrated in first- and second-tier cities [3][4]. - Financing costs have decreased, and the company maintains a relatively high dividend payout ratio of 52%, with a dividend yield of 7.36% based on the closing price as of March 28 [4][8]. - The company has adjusted its revenue assumptions downward while slightly increasing the gross profit margin estimates for 2025-2027. The estimated EPS for 2025 is 2.07 RMB, with a projected BPS of 13.63 RMB [5][6]. Summary by Sections Financial Performance - For 2024, the company achieved a revenue of 143 billion RMB, with a core net profit of 4.3 billion RMB, reflecting a year-on-year revenue growth of 6% and a slight decline in net profit of 1.6% [1][2]. - The gross profit margin for 2024 was reported at 13.3%, an increase of 2.2 percentage points year-on-year [2]. Sales and Market Position - The company’s contract sales fell by 25% year-on-year, but it improved its cash collection rate to 102% and sales equity ratio to 77% [3]. - The company has a strong market presence in 44 cities, ranking in the top 10 in local markets, particularly in Hangzhou [3]. Financing and Dividends - The company’s financing costs decreased by 19 basis points to 3.56%, and it maintains a high dividend payout ratio of 52% [4]. - The dividend yield is calculated at 7.36% based on the closing price as of March 28 [4][8]. Earnings Forecast and Valuation - The company has adjusted its revenue estimates downward while slightly increasing gross profit margin estimates for the upcoming years. The estimated EPS for 2025 is 2.07 RMB, with a target price of 19.29 HKD based on a PB ratio of 1.32 [5][6].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][6] Core Views - The company has shown stable performance in revenue recognition with an increase in gross profit margin despite a slight decline in profit mainly due to impairment losses [6][7] - The company is expected to recover its profitability quickly, supported by a high proportion of new land reserves and a steady increase in market share [6][8] Financial Performance - For the year 2024, the company reported revenue of 142.99 billion HKD, a year-on-year increase of 6.4%, while the net profit was 4.80 billion HKD, a decrease of 4.6% [7][10] - The gross profit margin improved to 13.3%, up by 2.2 percentage points year-on-year [7][10] - The company plans to distribute a dividend of 1.2 HKD per share, maintaining a dividend payout ratio of 52% [7] Market Position and Strategy - In 2024, the company achieved sales of 133.5 billion HKD, ranking 7th in the industry, with a focus on acquiring quality land in core cities [8] - The company’s land acquisition amounted to 55.6 billion HKD, with a land acquisition intensity of 41.6% and a focus on first and second-tier cities [8] Future Projections - The company’s projected net profits for 2025-2027 are 5.30 billion, 5.73 billion, and 5.86 billion HKD respectively, with corresponding EPS of 2.85, 3.08, and 3.15 HKD [6][10] - The current price-to-earnings (P/E) ratios for 2025-2027 are estimated at 5.7, 5.3, and 5.2 times [6][10]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown stable performance in revenue recognition with an increase in gross profit margin despite a slight decline in profit mainly due to impairment losses [6][7] - The company is expected to recover its profitability quickly, supported by a high proportion of new land reserves and a steady increase in market share [6] - The company’s sales ranking has improved against industry trends, focusing on acquiring quality land in core cities [8] Financial Performance - For 2024, the company reported revenue of 1429.9 billion yuan, a year-on-year increase of 6.4%, while net profit was 48.0 billion yuan, a decrease of 4.6% [7] - The gross profit margin for 2024 was 13.3%, an increase of 2.2 percentage points year-on-year [7] - The company’s earnings per share (EPS) for 2025-2027 are projected to be 2.85, 3.08, and 3.15 yuan respectively, with corresponding price-to-earnings (P/E) ratios of 5.7, 5.3, and 5.2 times [6][10] Market Position and Strategy - The company achieved a sales amount of 1335 billion yuan in 2024, ranking 7th in the industry, with a focus on high-quality land in first and second-tier cities [8] - The company’s land acquisition in 2024 amounted to 556 billion yuan, with a land acquisition intensity of 41.6% and an equity ratio of 80% [8] - As of the end of 2024, the total value of the company’s land reserves was 2210 billion yuan, with a high proportion of new land acquired since 2022 [8] Property Management - The company’s property management segment is stable, with a contracted area of 1.09 billion square meters and a collection rate of 94% [9] - The average financing cost has decreased to 3.56%, reflecting a 19 basis point reduction year-on-year [9]

Investment Rating - The report maintains a "Recommended" investment rating for the company [1][7]. Core Views - The company is expected to benefit from the release of high-quality residential demand, with a projected revenue of 1429.9 billion yuan in 2024, representing a year-on-year growth of 6.4%. However, the net profit is forecasted to decline by 4.6% to 48 billion yuan [3][6]. - The company has a healthy land reserve structure and is actively expanding its land acquisition, ranking first among the top 50 real estate companies in terms of land acquisition sales amount and area in 2024 [6][7]. - The company has maintained a stable dividend payout, with a dividend of 1.2 HKD per share, resulting in a dividend rate of 52% based on net profit after deducting perpetual bond interest [6][7]. Financial Summary - Revenue and Profit Forecast: - 2024 Revenue: 1429.9 billion yuan, up 6.4% YoY - 2024 Net Profit: 48 billion yuan, down 4.6% YoY - Projected revenue growth rates for 2025-2027 are 5.8%, 5.2%, and 4.7% respectively [5][11]. - Profitability Metrics: - Gross Margin: 13.3% in 2024, up 2.2 percentage points YoY - Net Margin: 4.5% in 2024 - Return on Equity (ROE): 12.8% in 2024, declining gradually to 10.1% by 2027 [5][11]. - Valuation Ratios: - Price-to-Earnings (P/E) ratio is projected to be 6.3 for 2024, decreasing to 5.9 by 2027 - Price-to-Book (P/B) ratio is expected to decline from 0.8 in 2024 to 0.6 in 2027 [5][11]. Operational Insights - The company has a total land reserve value of 2210 billion yuan, with approximately 80% of the projects acquired since 2022 [6][7]. - The company is focusing on enhancing its core product offerings, particularly in competitive markets like Hangzhou, where it has established several benchmark projects [6][7].