GTJA released a research report stating that it maintains a 'shareholding' rating for Greentown China (03900). EPS for 2024-2026 is predicted to be CNY 1.35, CNY 1.53, and CNY 1.76, respectively. Marginal improvement in sales from company's self-investment project continued in June. The growth trend of monthly sales volume remained stable while the unit price remained stable as well. Against the backdrop of the slowing down of land acquisition in the industry, the company actively acquired land in the first half of the year and the ratio of land acquisition to sales was 0.24. In the first half of 2024, the total contract sales of the Greentown Group reached CNY 126.5 billion, a year-on-year decrease of 5.7%. The proportion of construction projects was 32.5%, with the main source of improvement in June being a significant year-on-year increase in the sales volume of self-investment projects.
GTJA's main opinions include:
The cumulative sales volume of self-investment projects in June increased year-on-year, leading to a narrowing of the decline rate in cumulative sales volume again after May, and sales showed a gradual recovery trend.
From January to June 2024, the cumulative sales area of self-investment projects was 2.8 million square meters, and the cumulative sales volume was CNY 85.4 billion, a year-on-year decrease of 16.9% and 13%, respectively, with the decline rate narrowing by 7.6% and 4.8% respectively. Overall, sales are in the process of gradual recovery. In June, sales continued to rebound, with a sales area of 0.53 million square meters and sales of CNY 17.4 billion, a year-on-year increase of 20.5% and 27%, respectively, with an increase of 13.9% and 0.4% from the previous month. The average sales price increased by 5.7% year-on-year and decreased by 0.7% month-on-month to CNY 32,531 per square meter. The company's sales performance in June was basically consistent with the industry, i.e., with the support of optimized policies, the sales market responded positively, and sales data showed a marginal improvement. The company will continue to pay attention to the continuity of sales in the traditional off-season of July and August.
The construction projects continued to improve, with the sales volume and new development area ranking first in the industry, consolidating the leading position of the sector business.
According to Zhongzhi data and company announcements, the sales area of construction projects from January to June was 3.11 million square meters, with sales of CNY 41.1 billion, a year-on-year increase of 16.5% and 14.2%, respectively. The newly signed area was 17.46 million square meters, with sales and newly signed areas both ranking first in the industry. At the same time, since 2024, the trend of 'trading volume for price' in the sales of construction projects has eased, and the average sales price has continued to rise month-on-month to CNY 13,215 per square meter since February.
Against the backdrop of the overall slowdown in land acquisition in the industry, the company actively acquired land in the first half of the year, with a land acquisition to sales ratio of 0.24.
According to CREIS data, the company's land acquisition amount in the first half of 2024 was CNY 20.7 billion, with a new land value of CNY 39.3 billion, and the absolute size of the land acquisition investment ranked among the top 5 in the industry. Combined with sales performance, the ratio of land acquisition to sales was 0.24, which, although lower than the overall land acquisition level of the top 10 real estate developers (0.15), showed a decline from the full-year 2023 (0.41). With respect to the distribution of the land, the company continued to deepen its layout in Hangzhou, with four new land reserves totaling CNY 5.2 billion since 2024, accounting for 25.1% of the total amount.
Risk Warning: Market demand may recover lower than expected.