CHINA RES LAND(01109) 招商证券·2025-04-01 12:34Investment Rating - The report gives a "Strong Buy" rating for China Resources Land (01109.HK) with a target price of HKD 34.86 per share, indicating a potential upside from the current price of HKD 25.9 [1][3]. Core Views - The report highlights that the increase in the proportion of recurring business profits supports the stability of the company's performance and shareholder returns. The operational real estate business, primarily focused on shopping centers, has sustainable growth potential both internally and externally. The gross profit margin of the development and sales business may gradually stabilize, and the ongoing transformation towards asset management is viewed positively. The company is expected to achieve earnings per share (EPS) of CNY 3.30, CNY 3.50, and CNY 3.89 for 2025, 2026, and 2027, respectively, with year-on-year changes of -8%, +6%, and +11% [1][12]. Financial Performance Summary - For the fiscal year 2024, the company reported total revenue of CNY 278.8 billion, a year-on-year increase of 11%. However, the net profit attributable to shareholders decreased by 18% to CNY 25.58 billion, primarily due to a decline in gross profit margins from development sales [2][12]. - The company’s core net profit for 2024 is projected to be CNY 25.4 billion, reflecting a 9% decline year-on-year. The revenue breakdown shows that the development sales business, operational real estate business, light asset management business, and ecosystem factor business generated revenues of CNY 237.15 billion, CNY 23.3 billion, CNY 12.13 billion, and CNY 6.22 billion, respectively, with year-on-year growth rates of 12%, 5%, 14%, and 1% [2][10]. - The overall gross profit margin decreased by 3.6 percentage points to 21.6%, with the development sales business gross margin dropping by 3.9 percentage points to 16.8%. In contrast, the operational real estate business gross margin increased by 0.4 percentage points to 70% [2][10]. Business Segment Insights - The shopping center segment opened 16 new centers in 2024, with retail sales and rental income continuing to grow. The company plans to maintain a stable opening pace over the next four years, which is expected to support rental income growth [8][10]. - The office rental income decreased by 9% to CNY 1.9 billion, with an occupancy rate dropping by 7 percentage points to 75% [9]. - Hotel revenue also saw a decline of 11% to CNY 2.1 billion, with a slight increase in occupancy rate to 64% [9]. Asset Management and Financial Health - The company’s asset management scale reached CNY 462.1 billion, an 8% increase year-on-year, with shopping centers contributing CNY 297.9 billion to this total [11][12]. - The debt structure has been optimized, with a weighted average financing cost of 3.11%, a decrease of 45 basis points year-on-year. The net interest-bearing debt ratio stands at 31.9% [12][12]. Dividend and Shareholder Returns - The core net profit distribution rate is maintained at 37%, with a proposed final dividend of CNY 1.119 per share, resulting in an estimated dividend yield of approximately 5.5% based on the report's release date closing price [12][12].