TAGEN GROUP(SZ:000090) HTSC·2025-05-05 15:25Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of 4.09 RMB [8][9]. Core Views - The company reported a significant decline in revenue and net profit for 2024, with revenues of 2.136 billion RMB and a net profit of 620 million RMB, representing year-on-year decreases of 20.9% and 59.1% respectively. The decline in profit was primarily due to an asset impairment loss of 530 million RMB [1]. - The company is expected to benefit from accelerated urban village renovations and the development of the Greater Bay Area, which supports the "Buy" rating [1][5]. - The construction business faced pressure due to a decline in new orders, with new signed orders amounting to 13.57 billion RMB, down 31.9% year-on-year [4]. Summary by Sections Financial Performance - In 2024, the company achieved revenues of 1.152 billion RMB from construction, 1.031 billion RMB from real estate sales, and 42 million RMB from property leasing, with year-on-year changes of -40.3%, -0.3%, and +5.2% respectively. The gross margin for construction was 5.0%, for real estate was 27.2%, and for property leasing was 36.4% [2]. - The operating cash flow for 2024 was 1.14 billion RMB, a decrease of 83.9% year-on-year, primarily due to reduced pre-sales and sales collections [3]. Order and Project Updates - The company has four ongoing development projects with a total planned construction area of 875,000 square meters and 21 projects for sale, with an unrecognized construction area of 1.329 million square meters [4]. - The company is actively participating in urban village renovation projects in Shenzhen, having successfully bid for several projects, which is expected to provide ongoing benefits [4]. Profit Forecast and Valuation - The profit forecast for 2025-2027 has been adjusted downwards, with expected net profits of 690 million RMB, 760 million RMB, and 820 million RMB respectively, reflecting a reduction of 41% and 45% from previous estimates [5]. - The target market capitalization for 2025 is set at 7.7 billion RMB, with a target price of 4.09 RMB per share, based on a price-to-earnings ratio of 12x for real estate and 5x for construction and other businesses [5].