PDH(SH:600048)2025-05-18 15:48Summary of Poly Developments Conference Call Company Overview - Company: Poly Developments - Period: January to April 2025 Key Points Industry and Market Performance - Sales Performance: Poly Developments achieved sales of 877 billion yuan, a year-on-year decrease of 9%, but still ranked first in the industry [3] - Core City Sales: Sales in core cities accounted for 91% of total sales, up from 90% in 2024. The sales contribution from core cities and new projects was significant, with new projects accounting for 64% of sales [3][20] - Market Trends: The market experienced a slight rebound followed by a decline, with visitor numbers dropping by 16% year-on-year. However, the conversion rate improved, and total transactions remained stable compared to the previous year [7] Financial Performance - Cost of Funds: The average cost of interest-bearing liabilities was approximately 2.8%, a decrease of 12 basis points year-on-year. The comprehensive cost of interest-bearing liabilities fell below 3% for the first time, currently at 2.96%, down 21 basis points [6] - Investment Confidence: The company has set aside an investment quota of 100 billion yuan for 2025, expressing confidence in achieving its annual targets [5] Land Acquisition and Development - Project Expansion: In the first four months of 2025, Poly Developments expanded 15 projects covering 1.46 million square meters, a year-on-year increase of 114%, with an investment amount of 30.8 billion yuan, up 315% [2][4] - Land Bank: As of the end of 2024, the company had approximately 52.8 million square meters of undeveloped land, with plans to address some through land storage policies [15] - Equity Ratio: The company maintained a high equity ratio in land acquisitions, reflecting confidence in market prospects and financial stability [8] Profitability and Margins - Profit Margins: The company aims for a pre-tax profit margin of no less than 15% on new land acquisitions. The overall gross margin is expected to exceed 20% if the pre-tax profit margin is achieved [10] - Future Projections: The settlement gross margin for 2025 is expected to remain stable compared to 2024, with a gradual recovery anticipated in 2026 and 2027 [12] Strategic Measures - Inventory Management: The company employs a sales-driven production strategy, ensuring that completed but unsold properties are managed effectively to maintain cash flow and sales prices [13] - Response to Market Conditions: The company is actively engaging with local governments to leverage policies that support land storage and project development, particularly in lower-tier cities [16] Financing and Capital Structure - Convertible Bonds: Poly Developments has received approval for a convertible bond issuance, aiming to optimize its capital structure and enhance risk resistance [21] - Future Financing Plans: The company plans to continue capital operations in line with policy opportunities, although no new product plans have been disclosed yet [22] Risk Management - Impairment Pressures: The company recorded an impairment of 5.5 billion yuan in 2024, with future pressures dependent on market trends. Management believes that market stabilization will alleviate these pressures [17] - Cash Flow Management: The introduction of pilot cities for immediate sales may impact cash flow, but the company is prepared to adapt its development processes to mitigate risks [18][19] Additional Insights - Sales Strategy: The company is focusing on enhancing the quality and speed of project execution, particularly in key markets like Beijing, Shanghai, and Guangzhou [3][20] - Market Position: Poly Developments has a market share of 7.1% in core cities, with expectations for continued growth in market presence [20]