Jingu Wealth News | Ping An Securities released a research report, Greentown Management Holdings (09979) released its 2024 interim report, achieving a revenue of 1.67 billion yuan in 2024H1, a year-on-year growth of 7.8%; net income attributable to the mother was 0.5 billion yuan, a year-on-year growth of 5.8%.

The bank pointed out that as of 2024H1, the company's contracted construction area and under-construction area were 0.12 billion and 0.053 billion square meters respectively. According to data from the China Index Research Institute, in 2024H1, Greentown Management ranked first in the industry with a new signing scale of 17.46 million square meters, maintaining an absolute lead in scale. However, with the continuous adjustment of the real estate industry, the suspension of land acquisition and construction by the property owner, as well as the obstruction of sales receipts, local land acquisition and storage policies have led to adjustments in the rental housing construction plan, and intensified industry competition has caused a decline in unit prices and industry rates, resulting in a year-on-year decline in the gross margin by 0.5 percentage points to 51.5%, and a year-on-year decrease of 18.1% in project construction fees for new expansion projects.

The bank further pointed out that as of 2024H1, the company covers 128 cities, with a corresponding contract sales value of 892 billion yuan. Among them, the contract area of the four major urban clusters accounts for 75.5%, and the sales value accounts for 75.6%; there are approximately 0.058 billion square meters of orders in hand waiting to start construction, ensuring continued transformation and steady performance. From the perspective of new expansion structure, state-owned business fundamentals are stable, accounting for 57.2% of the total new expansion business. Government construction projects have made their first entry into Shandong and Guangdong, and public construction product types have become more diverse. The first batch of capital relief projects have been delivered, and new construction cooperation has been added with financial institutions such as Eastern Assets, Great Wall Assets, and Hunan Caixin. In the medium to long term, the overall scale of the construction industry is still growing, and infrastructure construction, government projects, and relief construction are still expected to promote the penetration rate of construction companies.

The bank stated that as a leading domestic construction company, the company provides professional development and management services to realize brand and product premiums; government construction, urban investment, and capital-based construction are the basic business foundation, with a diverse range of customer institutions. Considering the current intensified competition in the construction industry and the constraints of the real estate industry adjustment, the bank has lowered the company's EPS forecast for 2024-2026 to 0.50 yuan (originally 0.62 yuan), 0.51 yuan (originally 0.78 yuan), and 0.52 yuan (originally 0.97 yuan) respectively. The current stock price (as of August 26, 2024) corresponds to PEs of 5.0 times, 4.9 times, and 4.8 times, but the bank believes that as a leading company in the construction industry, the company has comprehensive competitive advantages, and the light asset model still has the potential to pay dividends, maintaining a "recommended" rating.