CHINA OVERSEAS(HK:00688) Ping An Securities·2024-08-28 23:38Investment Rating - The report maintains a "Buy" recommendation for China Overseas Development (0688.HK) [2][4] Core Views - The company achieved a total revenue of 86.94 billion yuan in H1 2024, a year-on-year decline of 2.5%, and a net profit attributable to shareholders of 10.31 billion yuan, down 23.5% year-on-year, with an interim dividend of 0.3 HKD per share proposed [3][4] - The company ranked second in overall sales and first in equity sales in the industry, with a market share increase, focusing on key cities where sales from first-tier and key second-tier cities accounted for 83% of total sales [4] - The commercial segment saw a revenue growth of 20% in H1 2024, supported by effective cost control and financial advantages, with an average financing cost of only 3.5% [4] Summary by Sections Financial Performance - Revenue for 2024E is projected at 180.32 billion yuan, with a year-on-year growth of 12.3% [5] - Net profit for 2024E is estimated at 23.26 billion yuan, reflecting a year-on-year decline of 42.1% [5] - The gross margin is expected to stabilize around 20.0% for 2024E [5] Sales and Market Position - The company’s sales price per square meter increased by 21.7% to 27,279 yuan, with significant sales contributions from major cities [4] - The company has a strong cash position with 100.24 billion yuan in cash, representing 11% of total assets, enabling it to seize market opportunities [4] Future Outlook - The report forecasts EPS for 2024-2026 at 2.39, 2.43, and 2.47 yuan respectively, with corresponding P/E ratios of 4.4, 4.4, and 4.3 times [4][5] - The company is expected to maintain a robust operational performance despite industry challenges, leveraging its brand and operational advantages for potential growth [4]