CHINA RES LAND(01109) 长江证券·2025-03-25 05:14Investment Rating - The report assigns a "Buy" rating for the company, with a target price based on projected earnings and valuation multiples [10][11]. Core Viewpoints - The company is recognized as a leading player in the real estate sector, combining business models, capabilities, resources, and financial advantages to drive growth. It has a strong sales ranking despite market challenges, supported by ample and quality land reserves [4][10]. - The company has released significant impairment pressure, with new land acquisitions expected to yield substantial profits, indicating a high degree of performance solidity and realization probability [4][10]. - As a leader in commercial real estate, the company excels in various dimensions including layout, leasing, operations, scale, rental income, efficiency, and luxury offerings, which not only provide stable cash flow but also enhance dividend and valuation potential [4][10]. Summary by Sections Company Overview - The company is a rare diversified real estate developer in China, under the umbrella of China Resources Group, with a strategic focus on urban investment and development operations. It has established a "3+1" integrated business model and achieved a core net profit of 27.8 billion in 2023, with operational business contributing 34.4% [7][42]. Real Estate Development - The company has a strong reputation for quality and efficiency, with a projected sales revenue of 261.1 billion for 2024, ranking it among the top three in the industry. The land reserves are robust, with over 70% located in first and second-tier cities, ensuring future sales stability [8][20]. - The company has recognized a cumulative inventory impairment of 21 billion from 2020 to 2024, indicating a high level of impairment pressure release compared to peers, which bodes well for future profitability [8][20]. Operating Real Estate - The company is a pioneer in shopping center development in mainland China, with a strong positioning in high-end markets. It has maintained double-digit growth in same-store rental income since 2016, demonstrating robust operational capabilities [9][24]. - The company plans to achieve steady growth in rental income, with a projected EBITDA margin of 55% and potential for a dividend yield of approximately 2.7% based on its operational real estate performance [9][27]. Financial Performance - The company has a solid financial structure, with a net debt ratio of 33.6%, indicating prudent debt management. The projected earnings for 2024-2026 are 26.6 billion, 27.3 billion, and 28.7 billion respectively, with corresponding PE ratios of 6.5, 6.3, and 6.0 [10][36].