Huafa Properties(SH:600325) EBSCN·2024-05-30 02:02Investment Rating - The report maintains a "Buy" rating for the company, indicating a favorable outlook for investment over the next 6-12 months [3]. Core Insights - The company is enhancing resource integration and maintaining robust financial health, with a generous dividend performance and sufficient revenue reserves [1]. - The privatization of Huafa Property Service Group is expected to improve resource sharing and integration between real estate and property services, potentially increasing the contribution to the company's net profit [1]. - The company reported a revenue of 72.1 billion yuan in 2023, a year-on-year increase of 19.4%, driven by increased settlement scale in development business [1]. - The company plans to distribute a dividend of 1.02 billion yuan, which represents 55.4% of the net profit for 2023, reflecting a 25 percentage point increase year-on-year [1]. Financial Performance - In 2023, the company achieved a net profit of 3.5 billion yuan, a decline of 29.6% year-on-year, primarily due to decreased gross margins in development business and reduced investment income [1]. - The company’s gross margin for 2023 was 18.1%, with a slight decrease of 2.3 percentage points compared to the previous year [1]. - The company’s total liabilities were reported at 320 billion yuan by the end of 2023, with a net debt ratio of 74.2% and a cash-to-short-term debt ratio of 1.92 times, indicating stable financial leverage [1]. Sales and Market Position - The company acquired 23 new projects in 2023, focusing on key cities such as Shanghai, Hangzhou, and Chengdu, contributing to a robust land reserve [1]. - The sales revenue for 2023 was 126 billion yuan, a year-on-year increase of 4.8%, with significant contributions from the East China and South China regions [1]. - However, sales in the first four months of 2024 saw a decline of 58.3% year-on-year, attributed to market demand downturn and high base effects [1]. Earnings Forecast and Valuation - The earnings per share (EPS) estimates for 2024 and 2025 have been revised down to 0.82 yuan and 1.00 yuan respectively, with a new estimate for 2026 at 1.12 yuan [1]. - The current stock price corresponds to price-to-earnings (P/E) ratios of 8.8, 7.1, and 6.4 for 2024, 2025, and 2026 respectively, indicating a favorable valuation compared to industry peers [1][2].