According to a research report, YUEXIU PROPERTY (00123) maintains a "Buy" rating, with sales performance outperforming the broader market through balanced commercial and residential development and healthy financial position. The company's net profit attributable to shareholders for 2025-2027 has been revised upward to 13.4/15.4/17.8 billion yuan (from previous forecasts of 13.2/15.1/16.1 billion yuan). The current stock price corresponds to 2025-2027 PE (basic) valuations of 14.7/12.7/11.0 times respectively.
**Sales Performance Outperforms Market Trend**
From January to August 2025, the company achieved sales of 730.1 billion yuan (up 3.7% year-over-year), outperforming the broader market (during the same period, CRIC's top 100 developers saw a 13.8% decline in total sales). Breaking down volume and price, sales area reached 1.806 million square meters in the first eight months, with an average selling price of 40,400 yuan per square meter (up 36.5% year-over-year), showing a clear shift in sales structure toward higher-tier cities.
As of June 30, 2025, the company's land reserves totaled approximately 20.43 million square meters, with 94% located in first-tier and second-tier cities, providing quality land reserves to ensure sustainable future development. Notably, the company's marginal sales trend showed a slight decline in August, with sales area of 169,000 square meters and average selling price of 32,500 yuan per square meter. Further tracking is needed to observe subsequent sales trend changes.
**Property Settlement Gross Margin at Bottom, Steady Commercial-Residential Development**
In the first half of 2025, the company recorded operating revenue of 47.57 billion yuan (up 34.6% year-over-year) and gross profit of 5.06 billion yuan (up 4.4% year-over-year), with a gross margin of 10.64% (compared to 13.72% in the first half of 2024). The gross margin for the property development settlement segment remains at bottom levels.
The company continues to advance its commercial-residential strategy. In the first half, commercial property rental income reached 268 million yuan, while YUEXIU REIT generated operating revenue of 966 million yuan, with an overall occupancy rate (excluding hotels and apartments) of approximately 82%. YUEXIU SERVICES maintained steady growth with revenue of 1.962 billion yuan in the first half and properties under management of approximately 72.31 million square meters.
**Healthy and Safe Financial Position with Industry-Leading Financing Costs**
As of June 30, 2025, the company's total monetary funds (including cash and bank balances, term deposits, and other restricted deposits) amounted to 44.64 billion yuan. The "three red lines" remain in the green category, with asset-liability ratio (excluding advance receipts) at 64.6%, net gearing ratio at 53.2%, and cash-to-short-term debt ratio at 1.7 times.
In the first half of 2025, the company continued to optimize its debt structure, with short-term debt accounting for 24%. Financing costs further decreased, with the weighted average borrowing rate declining by 41 basis points year-over-year to 3.16%. The average borrowing rate at period-end fell below 3%, maintaining industry-leading financing costs.