YUEXIU PROPERTY(00123) 交银国际证券·2024-08-29 06:11Investment Rating - The report maintains a "Buy" rating for the company, Yuexiu Property (123 HK), with a target price of HKD 6.60, indicating a potential upside of 72.8% from the current price of HKD 3.82 [2][6]. Core Insights - The company's performance for the first half of 2024 met expectations, with revenue increasing by 10.1% year-on-year to RMB 35.34 billion. The real estate development and management segments saw revenue growth of 10.2% and 45.2%, respectively [2][5]. - The gross profit margin declined by 4.1 percentage points to 13.7%, primarily due to a decrease in development margins. Core net profit fell by 18.8% to RMB 1.74 billion, aligning with forecasts [2][5]. - The company expects sales to improve in the August to October period, although achieving the full-year sales target of RMB 1.47 trillion may be challenging under current market conditions [2][5]. - The average financing cost decreased by 41 basis points to 3.57%, with expectations for further reductions in a more liquid environment [2][5]. Financial Overview - For the first half of 2024, the company reported a revenue of RMB 35.34 billion, with a gross profit of RMB 4.85 billion, reflecting a gross margin of 13.7% [5][7]. - The company has a stable net debt ratio of approximately 58.6%, with cash levels increasing to RMB 48.14 billion [2][5]. - The projected revenue for 2024 is RMB 86.79 billion, with a core profit forecast of RMB 3.27 billion, indicating a decline of 15.2% year-on-year [4][7]. Market Position - The company holds a land bank of 25.03 million square meters, with about 40% located in the Greater Bay Area, and approximately 44% of its projects are in first-tier cities [2][5]. - The management remains optimistic about capturing market demand when conditions improve, supported by a solid financial position and favorable government policies for state-owned enterprises [2][5].