LONGFOR GROUP(HK:00960) CMS·2025-04-01 13:32Investment Rating - The report maintains a "Strong Buy" rating for the company [1][12]. Core Views - The company's revenue and profit decline in 2024 are primarily due to the development business, while the operational and service segments show steady growth, contributing 70% to gross profit [2][12]. - The company is expected to face a peak in public debt repayment in 2025, but operational loans are anticipated to provide support for repayment [12]. - By the end of 2025, the company's financial pressure is expected to significantly ease, leading to a potential increase in free cash flow and improved investment cycles [12]. Financial Performance Summary - In 2024, total revenue was 127.5 billion yuan, a year-on-year decline of 29%, with a pre-tax profit of 18.7 billion yuan, down 24% year-on-year [2][3]. - The core net profit for 2024 was 6.97 billion yuan, reflecting a 38% decrease year-on-year [2]. - The company’s earnings per share (EPS) for 2025, 2026, and 2027 are projected to be 0.96, 1.05, and 1.14 yuan respectively, with corresponding price-to-earnings (PE) ratios of 9.5, 8.7, and 8.0 [12][3]. Business Segment Analysis - The development business faced a 35% revenue decline in 2024, while operational and service businesses grew, with operational revenue increasing by 5% and service revenue by 10% [2][10]. - The company plans to open 11 shopping centers in 2025, maintaining the same number as in the previous year, indicating stability in the operational segment [11][12]. - The debt scale has been systematically reduced, with a total interest-bearing debt of 176.3 billion yuan at the end of 2024, down 8% from the previous year [12][10]. Valuation Metrics - The current stock price is 9.83 HKD, with a market capitalization of 67.6 billion HKD [4]. - The company’s return on equity (ROE) is reported at 6.4%, with a debt-to-asset ratio of 63.1% [4][14]. - The projected PE ratios for the upcoming years suggest a potential undervaluation, with the company trading at lower multiples compared to historical averages [12][14].