Investment Rating - The report assigns a "Buy" rating for China Resources Land (01109.HK) [5] Core Views - China Resources Land, backed by a state-owned enterprise, demonstrates stable sales and land acquisition, with a continuous increase in market share and ample land reserves to support future performance [5] - The company is expected to achieve net profits of 27.74 billion, 30.47 billion, and 33.88 billion yuan for the years 2024 to 2026, with corresponding EPS of 3.89, 4.27, and 4.75 yuan, indicating a low PE ratio of 6.2, 5.7, and 5.1 times [5] Summary by Sections Sales and Land Acquisition - In 2024, the company achieved a contracted sales amount of 261.1 billion yuan, a year-on-year decrease of 15.0%, ranking among the top three in the industry with a market share of 2.7% [6][48] - The company maintained a strong land acquisition intensity, with rights land acquisition amounts exceeding 110 billion yuan from 2021 to 2023, and a focus on first-tier cities, where the acquisition amount accounted for 60% in 2024 [6][59] - As of the first half of 2024, the company had a total land reserve of 56.99 million square meters, with 84% being development and sales-type land reserves, and over 70% located in first and second-tier cities [6][72] Real Estate Operations - The company reported total rental income of 11.47 billion yuan in the first half of 2024, a year-on-year increase of 7.0%, with a core net profit of 4.51 billion yuan, up 12.5% [7][81] - The shopping center segment has shown strong growth, with 82 centers opened and 46 under development, aiming to increase operational centers to 110 by the end of 2027 [7][86] Financial Performance - In the first half of 2024, the company’s revenue increased by 8.5% year-on-year, while the net profit decreased by 25.4% due to a decline in gross profit margin [8][37] - The company maintains a healthy debt structure, with a net debt ratio of 33.6% and a cash-to-short-term debt ratio of 1.54, indicating strong liquidity [8][78] - The expected revenue for 2024 is 266.56 billion yuan, with a gradual recovery in gross margin anticipated in the following years [9][82]

Group 1 - The core point of the article is the recent land transactions in Beijing's Shunyi District, highlighting the competitive bidding for residential land and the strategic implications for developers like China Resources Land and Greentown [1][3]. - China Resources Land acquired a residential land parcel in Shunyi District for 6.024 billion yuan, with a floor price of 35,007 yuan per square meter, indicating strong demand for low-density residential properties in the area [1][2]. - The land parcels in question have a low plot ratio of 1.01 and a height limit of 24 meters, making them rare low-density villa residential lands within the Sixth Ring Road, appealing to high-net-worth buyers [3]. Group 2 - In addition to the Shunyi District transaction, two residential land parcels in Jinhua were sold for a total of 825 million yuan, with Greentown winning one parcel at a slight premium [1][4]. - The Jinhua land parcels have a higher plot ratio of 1.80 and a height limit of 60 meters, indicating a different market dynamic compared to the Shunyi District [3][4]. - The competitive bidding process in Jinhua included 18 rounds for one of the parcels, reflecting the active interest in residential development in the region [3].

Core Viewpoint - Shanghai Huaren Ruicheng Real Estate Co., Ltd. has been established with a registered capital of 1.8 billion yuan, focusing on various real estate services [1] Company Summary - The legal representative of the newly established company is Lou Shanjie [1] - The company's business scope includes real estate development, construction engineering, residential interior decoration, real estate consulting, and brokerage services [1] - Shanghai Huaren Ruicheng Real Estate Co., Ltd. is wholly owned by Shanghai Xuzhen Enterprise Management Co., Ltd., which is a wholly-owned subsidiary of China Resources Land Limited [1]

Investment Rating - The report gives a "Buy" rating for China Resources Land (1109.HK) for the first time [6][9]. Core Views - China Resources Land is positioned as a leading urban investment and development operator with a comprehensive business model that integrates development, operational real estate, asset management, and light asset management [8][20]. - The company has shown resilience in revenue and profit growth, maintaining a strong financial structure with low financing costs [8][32]. - The company is expected to benefit from industry trends, with projected EPS for 2024-2026 at 3.83, 3.97, and 4.19 CNY respectively, corresponding to P/E ratios of 6.1, 5.8, and 5.5 [9][32]. Summary by Sections Company Overview - China Resources Land was established in 1994 and listed in Hong Kong in 1996, becoming a state-owned enterprise recognized for corporate governance in 2022 [16][18]. - The company operates in 85 cities across mainland China and Hong Kong, focusing on urban investment and development [16][18]. Business Model - The company has developed a "3+1" integrated business model, which includes development sales, operational real estate and asset management, and light asset management [20][22]. - As of 2024H1, the asset management scale reached 449.1 billion CNY, with a 5.1% increase from the previous year [22][23]. Financial Performance - In 2023, the company reported revenues of 251.1 billion CNY and a net profit of 31.4 billion CNY, reflecting year-on-year growth of 21.3% and 11.7% respectively [32][34]. - The gross profit margin for 2024H1 was 22.3%, with a net profit margin of 13% [35][41]. Sales and Market Position - The company focuses on first and second-tier cities, with sales amounting to 261.1 billion CNY in 2024, maintaining a market share of 2.7% [47][48]. - The average selling price of projects has increased by 28.1% from 2021 to 2024, outperforming the average increase of 23.8% among top 100 real estate companies [53]. Operational Strengths - The company has a strong competitive edge in product quality and land acquisition, with a well-structured land reserve of 47.71 million square meters as of 2024H1 [8][20]. - The operational real estate segment contributed significantly to the company's revenue, with rental income from shopping centers accounting for 82.7% of operational real estate revenue [26][29].

Group 1 - Shanghai China Resources Yueneng Real Estate Co., Ltd. has been established with a registered capital of approximately 4.7 billion yuan [1] - The company's business scope includes real estate development and operation, residential interior decoration, real estate consulting, real estate brokerage, property management, and housing leasing [1] - The company is jointly held by China Gezhouba Group's China Energy Construction Urban Investment Development Co., Ltd., China Resources Land's Shanghai Xuzhen Enterprise Management Co., Ltd., and Yuexiu Group's Hangzhou Yile Industrial Investment Co., Ltd. [1]

Core Viewpoint - The company reported a total revenue of approximately 32.0 billion yuan for the month, with a year-on-year growth of 52.4% and a month-on-month growth of 28.4% [1] Group 1 - The cumulative revenue for the year 2024 up to December is approximately 261.1 billion yuan, reflecting a year-on-year decrease of 15.0% and a month-on-month increase of 13.3% [1] - The total construction area for the month reached approximately 1.301 million square meters, marking a year-on-year increase of 52.4% and a month-on-month increase of 28.4% [1] - The total construction area for the year 2024 up to December is approximately 11.332 million square meters, with a year-on-year decrease of 15.0% and a month-on-month increase of 13.3% [1]

Core Viewpoint - The appointment of Xu Rong as the new president of China Resources Land marks a strategic shift towards urban renewal, addressing the company's growth challenges in a slowing real estate market [8][22][23]. Leadership Changes - Xu Rong joined China Resources Land in January 2023 as Vice President and will become Executive Director and member of the Executive Committee in October 2024 [1][11]. - The position of president has been vacant since Wu Bingqi's resignation in September 2023, and during this interim period, Li Xin, the Executive Director and Chairman, will assume the responsibilities of the president [3][10][23]. - Xu Rong is the first president of China Resources Land in nearly a decade not to have risen through the ranks of China Resources Group [18]. Business Strategy - China Resources Land is shifting its focus from traditional real estate development to urban renewal, which is seen as a necessary adaptation to current market conditions [14][20][22]. - The company aims to enhance its operational efficiency and value through a comprehensive approach to urban renewal, which includes planning, relocation, development, and operation [5][19]. - The urban renewal division operates under a "one main, multiple" business model, emphasizing area-based value creation and light asset management solutions [5]. Financial Performance - In the first half of the year, China Resources Land's core net profit from development and sales business was 5.22 billion yuan, a decrease of 19% year-on-year [6]. - The company reported a revenue of 59.13 billion yuan from development and sales, an increase of 8.3% year-on-year, while its operating real estate business generated 11.47 billion yuan, up 7.0% [13]. Market Position - Despite being a leading player in the real estate sector, China Resources Land is experiencing a slowdown in growth, prompting a reevaluation of its business model [8][14]. - The company has seen a decline in land acquisition momentum, with a reported 34.9 billion yuan in land purchases in the first 11 months of the year, significantly lower than the previous year's total of 80.8 billion yuan [21].

Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Insights - The company achieved a total sales of 229.1 billion yuan from January to November 2024, with a year-on-year decline of 19.9%, but the decline rate has narrowed compared to previous months, indicating a recovery trend in sales [1]. - The company is actively increasing its core land reserves, with a total land reserve area of 56.99 million square meters, of which over 70% is located in first- and second-tier cities [2]. - The asset management business is steadily growing, with a total asset management scale reaching 449.1 billion yuan, primarily driven by shopping centers [3]. Summary by Sections Sales Performance - The company ranked third in the "Top 100 Real Estate Companies" by total sales, improving its position from the previous year [1]. - The sales area reached 9.95 million square meters, with a year-on-year decline of 17.5% [1]. Land Acquisition - In the first half of 2024, the company added 2.02 million square meters of land reserves, with 87% of the investment in first- and second-tier cities [2]. - In October and November 2024, the company acquired 850,000 square meters of land in key cities, with a total land cost of 41.4 billion yuan [2]. Asset Management - The company operates 82 shopping centers with a total area of 10.45 million square meters, achieving a high occupancy rate of 97.3% [3]. - The operational revenue from the asset management business reached 38.7 billion yuan, reflecting a year-on-year growth of 13.1% [3]. Financial Forecast - The core EPS for 2024-2026 is projected to be 3.64, 3.72, and 3.88 yuan, respectively, with corresponding PE ratios of 6.0, 5.9, and 5.6 times [4].

Core Viewpoint - Shenzhen has witnessed a significant residential land auction, with a record-breaking transaction price, indicating strong demand and a shift in land sale policies that favor developers [1][2][4] Group 1: Land Auction Details - The T107-0107 plot in Shenzhen's Nanshan District was auctioned with a starting price of 12.65 billion yuan and was ultimately sold for 18.512 billion yuan, setting a new record for residential land sales in Shenzhen [2] - The final floor price was 70,388 yuan per square meter, with a premium rate of 46.3% [2] - The auction process involved nearly 300 rounds of bidding, reflecting high interest from real estate companies despite the high entry threshold [2] Group 2: Policy Changes and Market Trends - Recent changes in land sale policies have removed several restrictions, allowing developers to set their own prices for residential properties without limitations from the "90/70" policy [2][3] - Major cities like Beijing, Guangzhou, and Shenzhen are experiencing a surge in large land sales exceeding 10 billion yuan, with developers given autonomy in pricing [2] - The demand for high-quality projects is increasing, as evidenced by the strong sales performance of major developers like China Overseas Land & Investment in key cities [3] Group 3: Market Activity and Sales Performance - The real estate market in Shenzhen is showing signs of recovery, with November seeing over 8,000 new and second-hand homes sold, marking significant year-on-year growth [3][4] - New home sales reached 8,734 units, a month-on-month increase of 86.8% and a year-on-year increase of 158.9%, the highest since February 2021 [3] - The increase in sales activity is attributed to the release of pent-up demand following recent policy optimizations [4]

Financial Performance - For the first half of 2024, the Group achieved a revenue of RMB 79.13 billion, representing a year-on-year growth of 8.4%[6] - The core net profit reached RMB 10.74 billion, a slight decrease of 4.7% compared to the previous year[6] - Recurring business revenue increased by 9.0% year-on-year, accounting for 25.3% of total revenue, an increase of 0.2 percentage points[6] - The core net profit from recurring business grew by 14.4% year-on-year, contributing 51.4% to total core profit, an increase of 8.6 percentage points[6] - The interim dividend per share is RMB 0.2, reflecting a year-on-year increase of 1.0%[6] - In 1H2024, the Group achieved total comprehensive revenue of RMB79.13 billion, a YoY increase of 8.4%[26] - The core net profit for the same period was RMB10.74 billion, reflecting a YoY decrease of 4.7%[26] - Recurring revenue increased by 9.0% YoY, accounting for 25.3% of total revenue, up by 0.2 percentage points YoY[26] - The core net profit of the recurring business rose by 14.4% YoY, with its profit contribution increasing by 8.6 percentage points YoY to 51.4%[26] Market and Economic Context - The national GDP of the PRC reached RMB 61.7 trillion in the first half of 2024, with a year-on-year growth of 5.0%[6] - National sales of residential properties amounted to RMB 4.7 trillion, showing a year-on-year decrease of 25.0%[6] - The total retail sales of consumer goods increased by 3.7% year-on-year, with service sales growing by 7.5%[6] - The overall performance of the Group outpaced the industry trend[6] Property and Rental Performance - In 1H2024, the Group's shopping mall rental income reached RMB 9.48 billion, a YoY increase of 9.7%[8] - The Group's 82 operating shopping malls achieved retail sales of RMB 91.62 billion, reflecting a YoY increase of 21.9%, with 69 malls ranking among the top three in their local markets[8] - The overall occupancy rate for the Group's office buildings was 75.0%, serving 120 Fortune 500 clients[8] - Revenue from the investment property business reached RMB 11.47 billion, up by 7.0% YoY[31] - Revenue from shopping malls was RMB 9.48 billion, representing a 9.7% YoY increase, with an occupancy rate of 97.3%, up by 1.1 percentage points YoY[31] Business Segments and Operations - CR Mixc Lifestyle achieved revenue of RMB 7.96 billion, a YoY increase of 17.1%, and core net profit of RMB 1.77 billion, a YoY increase of 24.2%[10] - The commercial management business maintained its industry-leading position, managing a total of 108 operating shopping malls[10] - The property management business expanded its managed area to 398 million square meters and contracted area to 446 million square meters[10] - The total number of MIXC STAR members exceeded 52.20 million, an increase of 13% compared to the end of last year[10] - The total amount of MIXC STAR points issued increased by 19% YoY to RMB 500 million, while the total amount of points redeemed increased by 21% YoY to RMB 340 million[10] Sales and Contracted Performance - In 1H2024, the Group achieved contracted sales of RMB124.70 billion, maintaining its industry ranking at fourth and top 5 market share in 20 cities[15] - Contracted sales in 1H2024 amounted to RMB124.70 billion, a decrease of 26.7% year-on-year, with contracted GFA down by 25.7% to 5.21 million square meters[41] - The Group's total contracted sales in the Shenzhen region were RMB16.02 billion, accounting for 12.8% of total contracted sales[42] - The East China region contributed RMB37.93 billion to contracted sales, representing 30.4% of the total[42] Financial Management and Costs - The Group's comprehensive financing cost was 3.24%, a decrease of 32 basis points from the beginning of the year, marking a historical low[17] - The Group's share of profits from investments in associates and joint ventures totaled RMB1.42 billion, a decrease of RMB0.53 billion YoY[30] - Income tax expenses increased by 16.3% YoY to RMB8.14 billion, with enterprise income tax expenses rising by 10.3% to RMB6.19 billion[30] - The Group's net interest-bearing debt-to-equity ratio was 33.6% as of June 30, 2024, an increase of 1.0 percentage point from 32.6% at the end of 2023[50] - The Group maintained a weighted average financing cost of approximately 3.24% as of June 30, 2024, down 32 basis points from 3.56% at the end of 2023[54] Corporate Governance and Compliance - The Company is committed to maintaining high standards of corporate governance and has adopted the Corporate Governance Code as its own[115] - The Company deviated from Code Provision C.2.1 of the Corporate Governance Code, as the roles of chairman and chief executive were not separated following the resignation of the President on September 28, 2023[115] - The Company has complied with the Corporate Governance Code provisions in force for the first half of 2024, except for the noted deviation[115] Dividend and Shareholder Information - The Company declared an interim dividend of RMB0.20 per share for the six months ended June 30, 2024, equivalent to HKD0.219 per share, compared to HKD0.216 per share in 2023[116] - The interim dividend will be payable on October 25, 2024, to shareholders listed on the register as of September 11, 2024[116] - Shareholders must submit completed dividend currency election forms by October 7, 2024, to receive dividends in RMB[118] Audit and Financial Reporting - The Company’s independent auditor, KPMG, reviewed the unaudited condensed consolidated financial information for the six months ended June 30, 2024, with no disagreements noted[116] - The interim financial report for China Resources Land Limited as of June 30, 2024, has been reviewed and found to comply with Hong Kong Accounting Standard 34[125] - The review was conducted by KPMG, ensuring the integrity of the financial reporting process[128] Investment Properties and Assets - The total carrying value of the Group's offices was RMB36.43 billion, accounting for 3.0% of total assets, with a total GFA of 1.36 million square meters, an increase of 7.7% YoY[31] - The total value of completed investment properties was RMB 195,889,424, while investment properties under construction amounted to RMB 58,786,868[177] - The Group measures its investment properties at fair value, with valuations conducted by independent and professionally qualified valuers at least every six months[179] Employee and Management Information - The Group had a total of 61,826 employees in mainland China and Hong Kong as of 30 June 2024[60] - Performance bonuses are granted on a discretionary basis, alongside other employee benefits including provident funds, insurance, and medical plans[60]