Group 1 - The Hang Seng Index has increased by 1% [1] - Real estate stocks have risen, with Longfor Group up over 7% and China Resources Land up over 4% [1]

Company Growth and Strategy - The company reported a resilient growth with a focus on high-quality development, emphasizing the importance of building solid foundations for future expansion [4]. - Future outlook includes a projected revenue growth of 10% for the next fiscal year, driven by new product launches and market expansion strategies [20]. - The company is actively investing in new technologies, with a budget allocation of $200 million for R&D in the upcoming year [20]. - The company is pursuing strategic acquisitions, targeting at least two potential companies in the property management sector to enhance its portfolio [20]. - The management provided an earnings guidance of $1.5 billion for the next quarter, representing a 12% increase compared to the previous quarter [20]. - The company is actively expanding its portfolio with multiple projects in key cities such as Zhengzhou, Chongqing, and Changsha [27]. - The overall strategy includes leveraging completed projects to drive future revenue growth and market penetration [31]. - The Group's strategy emphasizes high-quality development and solid financial management to ensure sustainable growth [138]. Market Expansion and Development Projects - Market expansion efforts are focused on Southern China, with plans to enter 15 new cities by the end of 2025 [20]. - The company has completed several major development projects, with a total gross floor area (GFA) of 1.5 million square meters under construction [16]. - The Changping Life Science Park Project in Beijing is expected to be completed by December 2025, with a 32% interest held by the company [16]. - The company has a 66% interest in the Tian Feng project in Guangzhou, with a total construction area of 131,093 sqm, expected to be completed by November 2025 [18]. - The Panyu Xiangjiang Project in Guangzhou is fully owned by the company, with a completed area of 65,945 sqm, expected to be completed by May 2025 [18]. - The company maintains a diversified interest structure across its projects, with ownership percentages ranging from 25% to 100% [27]. - The completion dates for several projects extend into 2030, indicating a long-term growth strategy [25]. Financial Performance and Revenue - In 2024, the Group achieved total revenue of RMB 127.5 billion, with the investment property operation and property service segments generating income of RMB 26.7 billion, representing a year-on-year increase of 7.4% [39][42]. - The core net profit attributable to owners of the Company was approximately RMB 7.0 billion while maintaining a stable dividend payout ratio [39][42]. - The Group's property development revenue for 2024 was RMB 100.77 billion, with a gross profit margin of 6.1% and an average selling price of RMB 13,226 per square meter [57]. - Contracted sales reached RMB 101.12 billion in 2024, with an average selling price of RMB 14,194 per square meter, and significant contributions from various regions [63]. - The rental income, net of tax, from the Group's investment property operation business was RMB 13.52 billion in 2024, representing a 4.5% increase from the previous year [70]. - The gross profit margin for the investment property operation business was 75.0%, reflecting a decrease of 0.8% compared to the previous year [73]. - The Group's operational cash flow, including capital expenditures, exceeded RMB 6.0 billion for the year, supporting financial stability [43]. Corporate Governance and Management - The Company appointed Mr. Chen Xuping as the Chairman of the Board and Chief Executive Officer on October 28, 2022, which deviates from the corporate governance code requiring separation of these roles [165]. - The Board consists of four executive directors, one non-executive director, and four independent non-executive directors, indicating a strong independence element [164]. - The Company has adopted and complied with the applicable code provisions in the Corporate Governance Code, except for the deviation regarding the roles of Chairman and CEO [163]. - The Board has established various committees, including the Audit Committee, Remuneration Committee, and Nomination Committee, to delegate specific responsibilities [175]. - The Company emphasizes the importance of corporate transparency and accountability in its governance practices [163]. - The Board will review the structure of the Chairman and CEO roles periodically to consider their separation when appropriate [165]. - The Company has mechanisms in place to ensure independent views and input are available to the Board [170]. Social Responsibility and ESG - The Group's cumulative public welfare donations exceeded RMB 2 billion, benefiting 2.34 million people nationwide [52]. - The Group's strategic focus on ESG governance includes ensuring 100% of new projects meet national green building standards [52]. - The Group's strategy for 2025 includes maintaining investment in core cities and focusing on inventory reduction while enhancing product offerings [127][131]. - The Company has implemented a diversity policy for the Board and employees, focusing on various aspects such as professional experience, cultural background, and gender [174].

龙湖集团2027年4月到期的3.375%债券每1美元涨2.8美分，至87.1美分，势创9月26日以来最大涨幅。 2028年1月到期的4.5%债券每1美元涨3.1美分，至85.3美分；2029年9月到期的3.95%债券每1美元涨2.2美 分，至77.7美分。 ...

Financial Performance - Contract sales amounted to RMB 101.12 billion, corresponding to a total sales area of 7.124 million square meters[2] - Revenue reached RMB 127.47 billion, with operating and service revenue increasing by 7.4% year-on-year to RMB 26.71 billion[2] - Profit attributable to the company's owners was RMB 10.40 billion, with core profit after tax at RMB 6.97 billion, resulting in a core profit margin of 6.4%[2] - Total comprehensive income for the year was RMB 11.67 billion, down from RMB 15.68 billion in the previous year[4] - Basic earnings per share were RMB 1.58, while core basic earnings per share were RMB 1.06[2] - Total revenue for the year ending December 31, 2024, was RMB 127,474,948,000, a decrease of 29.5% from RMB 180,736,575,000 in 2023[14] - Adjusted profit for the development segment was RMB 1,317,707,000, down 89.1% from RMB 12,078,240,000 in the previous year[14] - The total adjusted profit for the company was RMB 15,399,594,000, a decrease of 37.2% from RMB 24,528,297,000 in the previous year[17] - The company reported a net profit attributable to shareholders of RMB 10,401,171 in 2024, down from RMB 12,850,011 in 2023, a decrease of 19.1%[34] Debt and Liquidity - The net debt ratio stood at 51.7%, with cash on hand amounting to RMB 49.42 billion[2] - Total borrowings decreased by 8.5% year-on-year to RMB 176.32 billion, with an average financing cost of 4.0%[2] - As of the end of 2024, the company's interest-bearing debt decreased by RMB 16.3 billion to RMB 176.3 billion, with an average financing cost reduced to 4.00%[42] - The group’s debt is approximately 86.4% denominated in RMB, with 13.6% in foreign currencies, and all foreign currency borrowings are hedged against exchange rate risks[72] - The group has a cash-to-short-term debt ratio of 1.03 times, indicating a stable liquidity position[74] Assets and Liabilities - Investment properties increased to RMB 210.92 billion, up from RMB 199.75 billion year-on-year[5] - Cash and cash equivalents decreased to RMB 47.95 billion from RMB 59.22 billion year-on-year[5] - Total liabilities decreased to RMB 420,164,974,000 from RMB 463,948,608,000 in the previous year[17] - The company reported a consolidated asset total of RMB 665,641,785,000, down from RMB 700,406,875,000 in 2023[17] - The company’s trade payables and accrued construction costs totaled RMB 40.56 billion in 2024, down from RMB 42.48 billion in 2023[40] Revenue Segments - Revenue from external customers in the development segment decreased to RMB 100,766,610,000, a decline of 35.4% compared to RMB 155,857,211,000 in 2023[18] - The service segment's revenue increased to RMB 13,186,068,000, up 10.4% from RMB 11,943,543,000 in 2023[18] - Revenue from rental income was RMB 13,522,270,000, an increase of 4.5% from RMB 12,935,821,000 in 2023[18] - The company’s smart living services generated revenue of RMB 11.42 billion, with a year-on-year growth of 8%[44] - The property management segment achieved revenue of RMB 11.42 billion, managing a total area of 410 million square meters by year-end[78] Dividends and Shareholder Returns - The board proposed a final dividend of RMB 0.10 per share, totaling an annual dividend of RMB 0.32 per share[2] - The company proposed a final dividend of RMB 688,816,000 for 2024, compared to RMB 1,516,104,000 for 2023[32] Corporate Governance - The board of directors includes nine members, with Chen Xuping serving as both the chairman and CEO, which deviates from the corporate governance code[92] - The company is committed to high standards of corporate governance to enhance performance and company value[87] - The audit committee consists of three independent non-executive directors who reviewed the accounting principles and financial reporting matters[86] Strategic Initiatives - The group has invested over RMB 2 billion in public welfare, benefiting 2.34 million people across the country[48] - All new projects meet the national green building star rating standards, reflecting the group's commitment to low-carbon principles[48] - The group aims to enhance its corporate governance system to ensure high-quality and sustainable development[48] - The group plans to open 11 new shopping malls in 2025, focusing on cities like Hangzhou, Wuhan, and Chongqing, while maintaining a balanced development approach[77] Operational Highlights - The company delivered approximately 100,000 quality housing units across 43 cities in the past year, achieving a customer satisfaction rate of 90%[42] - The commercial segment achieved a rental rate of 97% by the end of 2024, contributing to stable operating profits and cash flow[43] - The average daily foot traffic for the year was 3.28 million visitors[58] - The overall gross profit margin for operations was 75.0%, a decrease of 0.8% year-on-year[54] Land Reserves and Acquisitions - The total land reserve of the group as of December 31, 2024, is 33.12 million square meters, with an equity area of 24.26 million square meters and an average cost of RMB 4,304 per square meter[66] - In 2024, the group acquired a total of 830,000 square meters of new land reserves, with an equity area of 390,000 square meters and an average equity acquisition cost of RMB 13,285 per square meter[66] - The land reserves are distributed regionally, with the Bohai Rim region accounting for 34.6%, the Western region 27.6%, the Central China region 15.0%, the Yangtze River Delta region 13.9%, and the South China region 8.9%[66]

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price revised down from HK$17.50 to HK$15.00 [5][9][12]. Core Insights - The company's core profit is expected to decline significantly from RMB 11.35 billion in 2023 to RMB 6.90 billion in 2024, primarily due to a decrease in sales and profit margins, alongside impairment losses [1][11]. - The report highlights that recurring income will support the company's performance in 2024, with a projected growth of 7.4% to RMB 26.7 billion, driven by rental and service income [1][9]. - The company is transitioning towards becoming a rental stock, with expectations that its profitability and financing will continue to be impacted by its real estate development business during 2025-2026 [2][9]. Financial Forecasts - Total revenue is projected to decline from RMB 180.74 billion in 2023 to RMB 120.24 billion in 2024, representing a year-on-year decrease of 33.5% [3][10]. - Gross contracted sales are expected to drop from RMB 173.49 billion in 2023 to RMB 101.12 billion in 2024, a decline of 41.7% [10]. - The gross profit margin is anticipated to decrease from 16.9% in 2023 to 15.1% in 2024, reflecting the impact of high land costs and falling property prices [1][10]. Debt and Financing - The company plans to use its land investment budget for deleveraging, aiming to repay approximately 10% of its total debt in 2024 [2][9]. - The report notes that the company has a significant amount of debt maturing in 2025, including RMB 10 billion in bonds and RMB 9.2 billion in syndicated loans [2][9]. Dividend Policy - The company is expected to maintain a dividend payout ratio of around 30%, despite the anticipated decline in core profits [1][2].

Group 1 - Recent market surveys indicate that suppressed rigid housing demand is beginning to be released, maintaining an "outperforming the market" outlook for the domestic real estate industry [1] - The company suggests focusing on real estate firms with strong commercial operational capabilities, such as China Resources Land, New World Development, and Longfor Group [1] - The long-term development of property management stocks is viewed positively, with attention on China Resources Mixc Lifestyle, Greentown Service, Poly Property, Binjiang Service, and Wanwu Cloud [1]

Group 1 - Longfor Group successfully completed the principal repayment and interest payment of the "21 Longfor Expansion MTN001" bond, involving a total amount of approximately 1.03 billion yuan [1] - Following this repayment, all publicly issued debts of Longfor Group due in 2024 have been fully settled [2]

Investment Rating - The report assigns a "Buy" rating for the company for the first time [2]. Core Views - The company has a broad future growth potential due to its three main business segments: development, operation, and service, which work in synergy [4]. - Revenue projections for 2024-2026 are estimated at 158.04 billion, 153.30 billion, and 149.14 billion yuan, with year-on-year growth rates of -12.6%, -3.0%, and -2.7% respectively [4]. - The company is expected to maintain a low price-to-earnings (P/E) ratio of 6.8, 6.1, and 5.6 for the years 2024, 2025, and 2026 [4]. Summary by Sections Company Overview - The company has over 30 years of experience, focusing on residential development, commercial investment, and property management across major cities in China [14]. - The company has a stable shareholding structure, with the Wu family being the largest shareholder [15]. Business Performance - In 2023, the company reported a revenue of 180.74 billion yuan, a decrease of 27.9% year-on-year, primarily due to a decline in property development revenue [21]. - The operating and service segments showed resilience, with a revenue increase of 5.7% year-on-year, contributing to 13.8% of total revenue [21]. Financial Health - The company maintains a strong financial position, with a cash-to-short-term debt ratio of 2.25 and a net debt ratio of 56% as of the end of 2023 [24]. - The company has successfully managed its debt structure, with no foreign bonds maturing before the end of 2026 [26]. Commercial Investment - The company has been actively expanding its commercial investment segment, with a focus on high-energy cities, having entered over 30 cities and opened 88 shopping centers by the end of 2023 [30]. - The company plans to open 14 new shopping centers in 2024, with a total expected area of 951,000 square meters [33].

Project Development - The company reported a completion rate of 70% for the Train New Town project in Baoding, with an expected completion date of December 2025 and a total construction area of 421,485 sqm[13]. - The company has 100% completion for the Xincheng Avenue project in Chengdu, with a total construction area of 56,073 sqm, expected to be completed by November 2024[13]. - The company holds a 50% interest in the Changping Life Science Park Project in Beijing, with an expected completion date of December 2025 and a total construction area of 114,000 sqm[13]. - The company reported a 75% unsold interest in the No. 23, Dong'an Street plot in Chengdu, with an expected completion date of December 2024[13]. - The company has a total of 30 ongoing development projects with a combined gross floor area (GFA) of approximately 3,000,000 square meters[15]. - The Pidu Zhongxin Avenue project in Chengdu is expected to be completed by May 2025, with a 100% ownership and a GFA of 158,833 square meters[15]. - The Longfor Origin project in Dongguan is set for completion in November 2025, with a 100% ownership and a GFA of 98,469 square meters[15]. - The company has a total of 20 principal development properties with varying completion dates, the earliest being in November 2024 and the latest in November 2028[18]. - The overall project interest in the Land Bridge Project in Lanzhou is 70%, with a gross floor area (GFA) of 99,593 sqm[18]. - The company has 100% interest in the Pengjiaping Xiping Street project in Lanzhou, which has a completed GFA of 88,462 sqm[18]. Market Expansion and Strategy - The company has a total of 13 cities in the Southern China region, contributing to its market expansion strategy[6]. - The company is actively developing new properties, with several projects in Chengdu and Beijing, indicating a focus on urban development[13]. - The company is exploring potential mergers and acquisitions to strengthen its market position and expand its portfolio[7]. - The company aims to increase its asset management capabilities to optimize returns on its property investments[7]. - The company is actively expanding its portfolio with multiple projects across various cities, focusing on residential and commercial developments[30]. - The company is focusing on strategic locations in major cities to enhance its market reach and customer base[32]. - Future projects are in the planning stage, which may further increase the company's market share and operational capacity[32]. - The Group is focused on enhancing operating cash flow, improving efficiency, and steadily reducing indebtedness while optimizing inventory structure[44]. Financial Performance - The Group reported a core attributable profit of RMB 4.75 billion for the first half of 2024, with revenues from investment property operation and services reaching RMB 13.1 billion, a year-on-year increase of 7.6%[41]. - The average financing cost for the Group is 4.16%, with the average contract loan term extended to 9.19 years, indicating a stable financial position[41]. - As of mid-2024, the Group's interest-bearing debt amounted to RMB 187.4 billion, a reduction of RMB 5.2 billion compared to the beginning of the year[41]. - The Group's property development revenue for the first half of 2024 was RMB 33.76 billion, with a gross profit margin of 7.4% and an average selling price of RMB 11,145 per square meter[60]. - The Group delivered a total gross floor area of 3.029 million square meters in the first half of 2024[60]. - The total contracted sales for the first half of 2023 were RMB 98.516 billion, indicating a significant decrease in sales year-over-year[69]. - The Group's net rental income from investment property operations for the first half of 2024 was RMB 6.61 billion, with shopping malls, rental housing, and other income contributing 78.4%, 19.8%, and 1.8% respectively[75]. Rental Income and Occupancy - Longfor Commercial achieved an overall occupancy rate of 96% across 91 shopping malls in 20 core cities by the end of June[50]. - The long-term rental apartment brand Goyoo generated rental income of RMB 1.31 billion in the first half of the year, with an occupancy rate of 95.6%[51]. - The overall rental income for the first half of 2024 showed a positive trend with several properties maintaining high occupancy rates above 90%[80]. - The rental income from shopping malls reached RMB 8.29 billion, a significant increase from RMB 5.32 billion in the same period of 2023, representing a growth of 55.5%[84]. - The average occupancy rate for shopping malls was 96.0% in the first half of 2024, slightly up from 95.4% in the same period of 2023[84]. Corporate Governance and Shareholder Information - The Company aims to retain existing employees and attract new talents through the Restricted Share Award Scheme[169][170]. - The Company has complied with the Corporate Governance Code, except for the dual roles of the Chairman and CEO held by Mr. Chen Xuping, which deviates from the code provision C.2.1[173][176]. - The Board declared an interim dividend of RMB0.22 per share for the six months ended June 30, 2024[183]. - Eligible shareholders can choose to receive the interim dividend in cash, new shares, or a combination of both under the Scrip Dividend Scheme[183]. - As of June 30, 2024, HSBC International Trustee Limited holds 4,372,437,207 ordinary shares, representing approximately 64.609% of the company's equity[157].

Investment Rating - The report maintains a "Buy" rating for the company [3] Core Insights - The company reported a revenue of 46.86 billion yuan for the first half of 2024, a year-on-year decrease of 24.5%, and a net profit attributable to shareholders of 5.87 billion yuan, down 27.2% year-on-year [2] - The development business continues to face pressure, while diversified operations support performance; inventory reduction needs to accelerate, and the debt structure is improving [2] - The company’s sales for the first half of 2024 were 51.1 billion yuan, a decline of 48.1%, with over 90% of sales coming from first- and second-tier cities [2] Financial Performance Summary - Revenue breakdown for H1 2024: Development business revenue was 33.76 billion yuan (down 32.3%), operational business revenue was 6.61 billion yuan (up 4.3%), and service business revenue was 6.49 billion yuan (up 11.1%) [2] - The overall gross margin was 20.6%, a decrease of 1.8 percentage points year-on-year, primarily due to a 6.9 percentage point drop in the development business margin to 7.4% [2] - The company’s net profit forecast for 2024-2026 has been revised down to 10.93 billion yuan, 11.61 billion yuan, and 13.25 billion yuan respectively [2] Debt and Cash Flow - As of June 2024, the company’s total debt was 187.4 billion yuan, with a net debt ratio of 56.7% and a cash-to-short-debt ratio of 1.01 times [2] - The average loan term is 9.2 years, indicating a stable financial condition [2] Market Position and Future Outlook - The company plans to open approximately 10 new shopping malls in the second half of 2024, with a total of 91 malls in operation by mid-2024 [2] - The report suggests that despite current market pressures, the company is expected to maintain steady long-term growth due to its diversified business model [2]