SINOLINK SECURITIES·2024-07-10 06:30Investment Rating - The report downgrades the investment rating of the company from "Accumulate" to "Neutral" due to increased performance pressure and cash flow challenges [3]. Core Views - The company is expected to report a significant loss in net profit for the first half of 2024, with estimates ranging from a loss of 7 to 9 billion RMB, representing a year-on-year decline of 171% to 191% [2]. - The company is focusing on cash flow management, inventory reduction, and asset disposal to address performance pressures [2]. - Key management personnel plan to increase their holdings in the company's A-shares, amounting to 200 million RMB, to boost investor confidence [2]. Financial Summary - The company's projected net profit for 2024 is expected to be -4.98 billion RMB, with subsequent years showing slight recovery to 2.57 billion RMB in 2025 and 2.63 billion RMB in 2026 [3][5]. - Revenue is projected to decline from 465.74 billion RMB in 2023 to 376.85 billion RMB in 2024, reflecting a decrease of 19.09% [5]. - The diluted earnings per share (EPS) is expected to drop to -0.418 RMB in 2024, with a gradual recovery to 0.215 RMB in 2025 and 0.221 RMB in 2026 [5]. Operational Highlights - The company completed the delivery of 74,000 housing units in the first half of 2024 and achieved sales of 127.33 billion RMB, a year-on-year decrease of 37% [2]. - The company has successfully managed debt repayments and generated cash flow through bulk transactions, amounting to 9.34 billion RMB [2]. - The company is actively pursuing a comprehensive plan to restructure its business and mitigate risks in the current challenging environment [2].