LONGFOR GROUP(00960) 东吴证券·2024-07-19 00:31Investment Rating - The report assigns a "Buy" rating for the company, marking its initial coverage [1]. Core Insights - The company has a diversified business model that supports growth across various segments, focusing on high-energy cities for its development activities [2][3]. - The company's operational and service segments contribute significantly to its profitability, helping it navigate through market cycles [2][3]. - The debt structure is well-managed, with a focus on maintaining low financing costs and a healthy balance sheet [2][3]. Summary by Sections 1. Company Overview - The company has been deeply involved in the real estate sector for over 31 years, establishing itself as a leading comprehensive real estate developer in China with a "1+2+2" business model [2][8]. - The ownership structure is stable, with significant control retained by the founding families [10][11]. 2. Development Business - The company has focused its development efforts on high-energy cities, with over 90% of sales coming from first and second-tier cities [2][3]. - Sales performance has been strong, with a compound annual growth rate of 15.1% from 2014 to 2023, and a sales completion rate in line with industry averages [2][3][15]. - The company has adopted a cautious approach to land acquisition, with a significant portion of its land reserves located in core cities [2][3][22]. 3. Operational and Service Segments - The operational business, including shopping malls and rental apartments, has shown stable growth, contributing over 60% to the company's profits [2][3][24]. - The rental income from the company's long-term rental apartments has been increasing, with a high occupancy rate and consistent profitability [2][3][28]. - The service segment, including property management, has also seen growth, with a focus on quality and customer satisfaction [2][3][29]. 4. Debt Structure and Financing - The company's debt levels have decreased, with a focus on maintaining a healthy financial position and low financing costs [2][3][32]. - The debt maturity profile is well-structured, with a significant portion of debt maturing in the longer term, reducing short-term repayment pressure [2][3][33].