LONGFOR GROUP(00960) 中国银河·2024-03-22 16:00Investment Rating - The report maintains a "Recommend" rating for Longfor Group (0960) [2] Core Views - Longfor Group's 2023 revenue was RMB 180.737 billion, down 27.87% YoY, with a net profit attributable to shareholders of RMB 12.85 billion, down 47.25% YoY [2] - The company's gross margin declined to 16.92% in 2023, down 4.25 percentage points from 2022, with development gross margin dropping to 11% from 17% [2] - Sales in 2023 reached RMB 173.488 billion, down 13.94% YoY, with a sales area of 10.796 million sqm, down 17.25% YoY, but the average selling price increased by 4% to RMB 16,069.6 per sqm [2] - The company added 31 new land parcels in 2023, with a total construction area of 3.68 million sqm and an average land cost of RMB 9,730 per sqm [2] - Rental income in 2023 was RMB 12.94 billion, up 8.9% YoY, with shopping malls contributing 77.4% of the total rental income [2] Financial Performance - The company's net debt ratio was 55.9% at the end of 2023, with a debt-to-asset ratio of 60.4% after excluding advance receipts [5] - Interest-bearing debt decreased by 7.4% to RMB 192.6 billion at the end of 2023, with short-term debt accounting for 13.9% and foreign debt for 17.7% [5] - The company's cash position remained strong, with RMB 60.42 billion in hand at the end of 2023, resulting in a cash-to-short-term debt ratio of 1.36 [5] - The average borrowing cost was 4.24% per annum, with an average loan term of 7.85 years [5] Business Operations - The company's shopping mall business achieved rental income of RMB 10.28 billion in 2023, up 9% YoY, with an occupancy rate of 96.2% [2] - Long-term rental apartments generated rental income of RMB 2.93 billion in 2023, up 13% YoY, with a five-year CAGR of 25% [2] - The company plans to open 14 new shopping malls in 2024, continuing its asset-light strategy [2] Regional Performance - Sales in the Yangtze River Delta, Bohai Rim, and Western regions accounted for 28.9%, 21.8%, and 28.4% of total sales, respectively [2] - The company's land reserves totaled 45.39 million sqm at the end of 2023, with an average land cost of RMB 4,705 per sqm, representing 29.3% of the current selling price [2] Future Outlook - The report forecasts revenue growth of 0.47%, 6.95%, and 5.78% for 2024, 2025, and 2026, respectively [5] - Net profit attributable to shareholders is expected to be RMB 12.85 billion, RMB 13.871 billion, and RMB 14.704 billion for 2024, 2025, and 2026, respectively [5] - The company's EPS is projected to be RMB 1.90, RMB 2.05, and RMB 2.17 for 2024, 2025, and 2026, respectively [5]