Jinwu Financial News | According to Oriental Securities Research, Longhu Group (00960) issued a 23-year results announcement. Operating revenue decreased 27.9% year over year to 18.74 billion yuan (RMB, same below), net profit to mother of 12.85 billion yuan, and net profit to mother decreased by 49.6% year on year to 11.35 billion yuan after excluding changes in fair value.
According to the bank, due to the overall decline in the industry, the company's development business was under pressure. Revenue decreased 31% year over year to 155.9 billion yuan, and gross margin fell further by 6.9 pct to 11.0%, which is expected to bottom out and stabilize. The operating business continued to grow. Rental income from owned properties increased 9% year on year, and gross margin increased to 76%; gross margin of property service revenue increased by 2 pct to 31.0%, reaching 360 million square meters of managed area.
The bank continued that in 2023, the company achieved positive operating cash flow as a whole. The company reduced its debt in a steady and orderly manner. As of the end of '23, interest-bearing debt was 192.6 billion yuan, down 7.4% year on year. Of this, the balance of debt maturing within 24 years was 14.7 billion yuan, accounting for about 8% (as of March 22). The balance of domestic corporate bonds in '24 was only 6 billion yuan, and there were no overseas public bonds maturing before the end of '26. By the end of '23, the company's operating property loan balance was 47.4 billion yuan. Since the beginning of '24, the operating property loan replacement amount for existing projects has increased by more than 11 billion dollars, and the operating assets held by the company still have room for financing.
The bank maintained the purchase rating and adjusted the forecast for sales growth rate, gross margin and expense ratio based on the company's disclosed data and recent operating conditions. The adjusted net profit forecast value for 23-25 years was 128.5/113.6/9.89 billion yuan (the original forecast for 23-25 was 210.4/225.9/25.08 billion yuan). Referring to comparable companies, the 2024 PE valuation was 5.6x, corresponding to a target price of HK$10.37.