CHINA OVERSEAS(HK:00688) Tianfeng Securities·2025-04-02 12:14Investment Rating - The investment rating for the company is "Buy" with a target price not specified [6][17]. Core Insights - The company achieved a revenue of approximately 185.15 billion RMB in 2024, a decrease of 8.58% year-on-year, and a net profit attributable to shareholders of 15.64 billion RMB, down 38.95% year-on-year [1][5]. - The company maintained its position as the industry leader in equity sales, with a contract sales amount of 310.6 billion RMB, reflecting a slight increase of 0.3% year-on-year, and an equity amount of 285.8 billion RMB, up 2.5% year-on-year [2]. - The company has a strong financial position with cash on hand of 124.71 billion RMB, an increase of 17.6% year-on-year, and a debt repayment of 17.55 billion RMB in 2024 [3]. - The commercial property revenue grew by 12.1% year-on-year to 7.13 billion RMB, with significant contributions from long-term rental apartments, which saw a 42.1% increase [4]. Summary by Sections Financial Performance - In 2024, the company reported a gross margin of 17.7%, down 2.6 percentage points from 2023, and a net margin of 9.6%, down 3.8 percentage points [1]. - The basic earnings per share (EPS) for 2024 was 1.43 RMB, a decrease of 38.9% year-on-year [1][5]. Sales and Market Position - The company’s market share increased to 3.21%, up 0.55 percentage points from 2023, despite a 13.8% decline in sales area [2]. - The average selling price per square meter rose to 27,000 RMB, an increase of 3,800 RMB from the previous year [2]. Land Acquisition and Investment - In 2024, the company acquired land in 12 cities with a total land price of 80.61 billion RMB, a decrease of 40% year-on-year [2]. - The company’s total land reserves and equity land reserves were 28.77 million square meters and 25.43 million square meters, respectively, covering approximately 2.5 years of sales [2]. Financial Strength - The company’s asset-liability ratio stood at 55.8% at the end of 2024, with a net debt ratio of 29.2% [3]. - The weighted average financing cost for 2024 was 3.1%, the lowest in the industry [3]. Commercial Operations - The company opened 9 new commercial property projects in 2024, increasing its total built area by 300,000 square meters [4]. - The light asset management business expanded, with 18 light asset projects acquired in first- and second-tier cities by the end of 2024 [4]. Future Outlook - The company is expected to continue leading the industry with strong sales and quality land reserves, despite anticipated impacts from declining housing prices on gross profit margins [4]. - Forecasted net profits for 2025 and 2026 are 16.37 billion RMB and 16.91 billion RMB, respectively, with an additional forecast for 2027 at 17.69 billion RMB [4].