Core Viewpoint - The company experienced a significant decline in revenue and net profit in the first half of 2025, primarily due to asset impairment provisions, despite a stable gross profit margin from settlements [1][2]. Group 1: Financial Performance - In the first half of 2025, the company achieved operating revenue of 53.368 billion, a year-on-year decrease of 23.5%, and a net profit attributable to shareholders of approximately 210 million, down 89.7% year-on-year [1]. - The revenue decline was mainly influenced by uneven delivery schedules, with a year-on-year decrease of 22.7% in recognized area for the first half of 2025; however, the settlement gross profit margin was approximately 13.41%, slightly up from 13.09% in the same period of 2024 [1]. Group 2: Land Acquisition and Sales - The company accelerated land acquisition in the first half of 2025, with self-invested project sales amounting to approximately 80.3 billion, a year-on-year decrease of 6%, and equity sales of 53.9 billion, with an equity ratio of about 67% [2]. - The company added 35 new projects with a total construction area of approximately 3.55 million square meters, expected to generate a saleable value of about 90.7 billion, with 88% of the value located in first and second-tier cities, and 47% in Hangzhou [2]. - The new land acquisitions in 2024 have shown a high sales realization rate, nearing 70% as of June 30, 2025, benefiting from relaxed price controls, with an estimated land acquisition profit margin of about 10% [2]. Group 3: Cash Flow and Debt Structure - As of June 30, 2025, the company had cash and cash equivalents of approximately 66.8 billion, which is 2.9 times the balance of borrowings due within one year, marking a historical high [2]. - The financing cost at the end of the period was 3.6%, down 40 basis points from 4.0% in the same period of 2024, with short-term debt accounting for 16.3%, a historical low [2]. - The company successfully issued a 500 million USD three-year senior note in February, marking the first issuance of USD bonds in the Chinese real estate sector since February 2023 [2]. Group 4: Investment Recommendation - The company's high land acquisition precision and product quality are key reasons for the recommendation, maintaining a strong sales realization since 2022 [3]. - However, the company still needs to address the old inventory from 2021 and earlier, which has lower settlement gross profit margins and impairment pressures, leading to an adjustment in EPS forecasts for 2025-2027 to 0.40, 0.61, and 0.95 yuan respectively [3]. - Based on the residual income model, the company's valuation is estimated at approximately 31.1 billion, with a target price of 13.4 HKD for 2025, corresponding to a 30 times PE ratio, maintaining a "recommended" rating [3].
绿城中国(03900.HK)：结算节奏影响业绩 拿地精准+好产品保障销售兑现