CHINA RES LAND(HK:01109)2024-08-29 04:16Investment Rating - The report maintains a "Buy" rating for China Resources Land (1109 HK) with a target price adjusted to HKD 24.94, indicating a potential upside of 19.3% from the current price of HKD 20.90 [2][8]. Core Insights - The company's operational real estate business shows stable growth, with property development revenue increasing by 8.3% year-on-year to RMB 59.1 billion in the first half of 2024, contributing to an overall revenue rise of 8.4% to RMB 79.1 billion [1][6]. - Despite a decline in gross profit margin by 3.4 percentage points to 22.3%, the company has maintained its dividend level, suggesting a commitment to shareholder returns [1][6]. - The leverage remains low with a net debt ratio of 33.6% as of June 2024, and the average financing cost has decreased to 3.24%, the lowest in the industry [1][6]. Financial Performance Summary - For the first half of 2024, the company reported a net profit of RMB 13.7 billion, a 25.4% decrease year-on-year, while core net profit fell by 4.7% to RMB 11.3 billion [1][6]. - The company plans to distribute an interim dividend of RMB 0.20 per share, reflecting a 1.0% increase year-on-year, with a payout ratio around 13% [1][6]. - The total asset management scale increased by 5.1% to RMB 449.1 billion compared to the end of 2023, indicating growth in its asset management segment [1][6]. Market Position and Outlook - The company’s contract sales for the first half of 2024 were RMB 124.7 billion, a decline of 26.7% year-on-year, with an average selling price of RMB 23,930 per square meter, down 1.4% [1][6]. - The company expects to have available resources of RMB 368.7 billion in the second half of 2024, estimating a sales conversion rate of 40-50% for the year [1][6]. - The operational real estate business is projected to maintain an annual growth rate of over 10% in the next three years, supported by the expansion of shopping centers from 82 to 110 by the end of 2027 [1][6].