WGQ(SH:600648) Guotai Junan Securities·2024-06-18 12:01Investment Rating - The report initiates coverage with a rating of "Buy" for the company, setting a target price of 11.83 CNY [24]. Core Views - The company is a key developer and operator in the Shanghai Free Trade Zone, holding 4.7 million square meters of quality rental property assets, which are expected to generate stable rental income with a potential growth range of 37% to 79% [14][29]. - The company has revised its shareholder return plan for 2023-2025, increasing the annual dividend payout ratio to over 50%, with a 2023 dividend ratio of 50.15% [16][40]. - The company is actively exploring innovative financing channels to support its capital-intensive operations, including A-share placements and REITs issuance, which could lower financing costs and alleviate debt pressure [30]. Summary by Sections 1. Core Views and Profit Forecast - The company operates in the Shanghai Free Trade Zone, leveraging its location to conduct park property operations, trade services, and urban renewal, with a stable rental income and significant growth potential [29]. - The rental income for 2023 is projected at 1.78 billion CNY, with a low vacancy rate of 8% and 80% of rental income derived from industrial properties [29]. 2. Business Segments - The park property operation segment is expected to be the main revenue driver, with projected revenue growth rates of 21.3%, 19.1%, and 18.9% from 2024 to 2026 [42]. - The trade and service segment is anticipated to grow at rates of 8.4%, 8.2%, and 6.3% during the same period, benefiting from the company's strategic location [31]. 3. Financial Performance - The company’s revenue for 2023 is estimated at 7.57 billion CNY, reflecting a decline from previous years due to market conditions, but the net profit remains at a historical high of 9.3 billion CNY [37]. - The company has maintained a consistent improvement in profitability, with net profit margins showing an upward trend since 2015 [38]. 4. Valuation - The report employs both absolute and relative valuation methods, concluding with a target price of 11.83 CNY based on a price-to-book ratio of 1.3X for 2024 [34][20].