YUEXIU PROPERTY(00123) 华泰证券·2025-04-01 06:13Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 6.85 [8][9]. Core Views - The company reported a revenue of RMB 86.4 billion for 2024, a year-on-year increase of 8%, but a significant decline in net profit attributable to shareholders of RMB 1.04 billion, down 67% year-on-year, which aligns with the earnings forecast [1][2]. - The decline in profitability is attributed to a decrease in gross margin from project handovers and inventory impairment, but there is optimism for recovery as the real estate sector stabilizes [1][2]. - The company’s sales revenue for 2024 was RMB 114.5 billion, a decrease of 19% year-on-year, but it outperformed the top 100 companies in the sector, which saw a 31% decline [3][4]. Summary by Sections Financial Performance - The company’s gross margin decreased by 4.8 percentage points to 10.5%, primarily due to a 5.4 percentage point drop in the gross margin of project handovers to 9.2% [2]. - The company recorded an inventory impairment of RMB 2.27 billion, an increase of RMB 700 million year-on-year [2]. - The total unsold resources at the end of 2024 were RMB 170 billion, down 15% year-on-year, but still more than double the amount expected to be recognized in 2024 [2]. Sales and Land Acquisition - The company’s land acquisition amount decreased by 21% to RMB 38.6 billion, with a land acquisition intensity of 34% [3]. - The company aims to achieve a sales target of RMB 120.5 billion for 2025, a 5% increase year-on-year, supported by a robust land reserve primarily located in first and second-tier cities [3][4]. Financing and Cost Structure - The company’s interest-bearing debt remained stable, with a cash-to-short-term debt ratio of 2.1x and a financing cost reduction of 33 basis points to 3.49% [4]. - The company successfully activated funds of RMB 13.5 billion through land acquisitions in Guangzhou, indicating a focus on optimizing existing projects [4]. Earnings Forecast and Valuation - The earnings per share (EPS) estimates for 2025, 2026, and 2027 are RMB 0.25, RMB 0.27, and RMB 0.34 respectively, reflecting a significant downward adjustment of 69% and 70% from previous estimates [5][21]. - The report shifts the valuation method from price-to-earnings (PE) to price-to-book (PB), with a target PB of 0.46x for 2025, leading to a target price of HKD 6.85 [5][21].