Changjiang Securities·2025-08-31 09:14Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company is a rare diversified real estate developer in China, with significant advantages in its business model. It has leading capabilities in development, finance, operations, and branding, along with ample and well-structured land reserves to ensure future sales scale. The pressure from impairments has been relatively well-released, and the profit margins from newly acquired land are attractive, indicating a high degree of performance solidity and realization [5][8]. - As a leader in the commercial sector, the company excels in various dimensions such as layout, leasing, operations, rental income, efficiency, and luxury retail. The commercial REITs facilitate asset exit channels, and high-quality self-owned assets provide stable cash flow to help navigate through cycles, which can also enhance the company's dividend and valuation potential [5][8]. Summary by Sections Financial Performance - In the first half of 2025, the company reported revenue of 94.9 billion (up 19.9%) and a net profit attributable to shareholders of 11.9 billion (up 16.2%). The core net profit was 10 billion (down 6.6%), with a comprehensive gross margin of 24.0% (up 1.8 percentage points). The interim dividend per share was 0.2 HKD, with a payout ratio of 14.3% relative to core earnings [5][8]. - Revenue and profitability improvements are driving performance growth, with a stable outlook for the future. The company’s total sales for the first half of 2025 were 110.3 billion (down 11.6%), ranking third in the industry, with a sales area of 4.119 million square meters (down 21.0%) and an average selling price of 27,000 HKD per square meter (up 11.9%) [8]. Land Acquisition and Sales - The company remains in the top tier for sales, with robust investments and ample land reserves ensuring future sales stability. In the first half of 2025, the company acquired 18 projects with a total land acquisition amount of 44.73 billion (up 74.7%) and a land area of 1.482 million square meters (down 26.8%). The average land price was 30,000 HKD per square meter (up 138.5%) [8]. - As of the first half of 2025, the company had a developable land reserve of 41.19 million square meters, with 70% located in first and second-tier cities, ensuring stable future sales [8]. Commercial Operations - The company is a leader in commercial operations, with both retail sales and occupancy rates showing growth. In the first half of 2025, shopping center retail sales reached 110.1 billion (up 20.2%), with luxury and non-luxury segments growing by 13.3% and 24.9%, respectively. The same-store sales growth rate was 9.4%, and the occupancy rate improved to 97.3% [8]. - Rental income for the first half of 2025 was 10.4 billion (up 9.9%), with a decrease in selling and administrative expense ratio to 12.1%, leading to an operating profit margin of 65.9%, showcasing industry-leading operational efficiency [8]. Investment Recommendations - The company is positioned as a rare diversified real estate developer with clear business model advantages. It is expected that the net profit attributable to shareholders will reach 26.2 billion, 27 billion, and 28.2 billion for 2025-2027, representing year-on-year growth of 2%, 3%, and 5%, respectively. The corresponding price-to-earnings ratios are projected to be 7.6, 7.4, and 7.0 times [5][8].