YUEXIU PROPERTY(HK:00123)2024-08-14 02:40Investment Rating - The report maintains a "Buy" rating for the company, Yuexiu Property (123 HK), with a target price adjusted to HKD 6.60, indicating a potential upside of 48.3% from the current price of HKD 4.45 [1][6]. Core Views - The report anticipates a decline in gross profit margin for the first half of 2024, expected to be between 13% and 14%, which is a critical indicator for the performance of real estate developers [1]. - Contract sales for the first half of 2024 are projected to be RMB 55.4 billion, representing a year-on-year decrease of 33.8%, and only 37.7% of the annual sales target of RMB 147 billion [1]. - The property management business is expected to see revenue growth exceeding 20%, benefiting from previous sales growth and stable deliveries [1]. - Revenue and profit forecasts for 2024 and 2025 have been revised downwards, with core profit estimates reduced by 34% and 35% respectively, primarily due to declining development profit margins and increased sales costs [1]. Financial Summary - For the fiscal year ending December 31, 2024, the projected revenue is RMB 86.79 billion, with a year-on-year growth of 8.2% [4][7]. - The core profit for 2024 is estimated at RMB 3.27 billion, reflecting a decline of 15.2% compared to the previous year [4][7]. - The report indicates a decrease in gross profit margin from 20.4% in 2022 to an expected 13.5% in 2024 [7]. - The company's net profit for 2024 is projected to be RMB 5.03 billion, with a slight increase to RMB 5.43 billion in 2025 [7].