Everbright Securities released a research report stating that it maintains a "buy" rating for China Resources Land (01109), considering factors such as the significant year-on-year decline in sales by November 2024 and lowering the forecasted core EPS for 2024-2026 to 3.64/3.72/3.88 yuan (previously forecasted as 3.94/4.09/4.47 yuan). According to data from Ke.com, China Resources Land achieved a total sales of 229.1 billion yuan and equity sales of 158.2 billion yuan from January to November.

The main points of view of Everbright Securities are as follows:

Sales year-on-year growth continuously positive, further industry ranking improvement:

According to Ke.com data, in January-November 2024, the company achieved sales of 229.1 billion yuan (total sales, the same below), a 19.9% year-on-year decrease, narrowing the decline by 2.5 percentage points compared to the previous ten months, ranking third on the Ke.com "Top 100 Chinese Real Estate Companies Total Sales List", up one place from 2023; achieved a sales area of 9.95 million square meters, a 17.5% year-on-year decrease; with sales of 31 billion yuan and 25.8 billion yuan in October and November, respectively, a year-on-year growth of 12.4% and 7.0%, and a month-on-month change of +83.4% and -16.8%, showing a clear trend of sales recovery. In the second half of 2024, the company's total salable resources amount to 368.7 billion yuan, with 85% located in high-energy tier-one and tier-two cities, abundant high-quality salable resources, and the potential for increased sales and marketing efforts during the year-end sales season to consolidate the sales recovery trend.

Seize investment opportunities, ample core land reserves:

During the first half of 2024, the company made steady investments, adding 2.02 million square meters of land reserves, with 87% of investments in tier-one and tier-two cities. As of the end of June 2024, the company owned a total land reserve area of 56.99 million square meters, with 47.71 million square meters allocated to development business, and over 70% of which are in tier-one and tier-two cities. From October to November 2024, the company seized opportunities in the real estate market recovery and core city land supply, acquiring 0.85 million square meters of new land in Shanghai, Guangzhou, Shenzhen, and Hangzhou, for a total land cost of 41.4 billion yuan. In Shanghai, it acquired four plots of land for a total land cost of 19.2 billion yuan, and jointly with China Overseas Development, acquired a plot of land in Shenzhen's Nanshan District for 18.5 billion yuan, actively supplementing core land reserves and laying a solid foundation for future sales.

Malls maintain rapid expansion, steady growth in asset management business:

As of the end of June 2024, the company's asset management scale reached 449.1 billion yuan, a 5.1% increase from the end of 2023. The main growth came from shopping centers, with a total of 82 operational shopping centers, covering a total area of 10.45 million square meters, a 28.6% year-on-year increase, overall occupancy rate at 97.3%, remaining high. In the second half of 2024, the company plans to open approximately 10 new shopping centers in Beijing, Shenzhen, and other locations, with the stable development of shopping centers laying the foundation for the company's gradual transition to large-scale asset management business. Currently, the company has built the China Resources MixC light asset management platform, as well as the Huaxia China Resources Commercial REIT and Huaxia Fund China Resources Nest REIT two public REIT platforms, unlocking asset value release channels. From January to October 2024, the company's operating revenue accumulated to 38.7 billion yuan, a 13.1% year-on-year increase, with rental income from operational real estate business at 24 billion yuan, a 14.8% year-on-year increase, making a significant contribution to the second growth curve of "large asset management".

Risk Warning: Sales and land acquisition below expectations, operational business performance below expectations, industry downturn exceeding expectations, etc.