Open source securities: maintain a "buy" rating for GREENTOWN CHINA (03900), optimistic about profit recovery after completion of low-margin project transfer.

Open Source Securities released a research report maintaining a "buy" rating on GREENTOWN CHINA (03900), with forecasted net profit attributable to shareholders of 36.54, 43.97, and 50.70 billion yuan for 2024-2026, corresponding to EPS of 1.44, 1.74, and 2.00 yuan, optimistic about the company's profit recovery after the completion of low-profit projects. The company released its August 2024 operating briefing. In August 2024, the company's sales amount slightly narrowed, with an increase in average selling price. The company actively obtained land in the open market, and its self-financing and building business progressed simultaneously, with ample land reserves and high-quality structure. Key points from Open Source Securities are as follows: Sales amount decreased year-on-year, with a significant increase in average selling price In August 2024, the company sold 2915 units in self-financed projects, with a sales area of approximately 270,000 square meters and sales amount of 8.3 billion yuan, a decrease of 14.43% year-on-year. The average selling price was approximately 31,067 yuan per square meter, an increase of 10.46% year-on-year. From January to August 2024, the company obtained a contract sales area of approximately 3.49 million square meters, with a contract sales amount of 104.5 billion yuan; of which the company's equity amount was 74 billion yuan. In August 2024, the company launched sales for 15 self-financed projects or project phases, with a total area of 130,000 square meters. As of August 31, 2024, there were also signed purchase agreements totaling 4.2 billion yuan yet to be converted into sales contracts, of which the company's equity amount was 26 billion yuan. Heavy investment in core cities, steady and proactive land acquisition in the open market In August 2024, the company acquired 4 new land reserves in the open market, with a total construction area of 180,700 square meters and a land acquisition cost of 8.89 billion yuan. Among them, two were in Shanghai, one located in Xuhui District with a construction area of 36,700 square meters, total price of 4.805 billion yuan, transacted floor price of 131,045 yuan/m2, premium rate of 30.00%; the other located in Hongkou District Jiangwan with a construction area of 24,800 square meters, total price of 1.2 billion yuan, transacted floor price of 48,447 yuan/m2, premium rate of 6.48%; one in Hangzhou, located in Gongshu District with a construction area of 50,400 square meters, total price of 1.887 billion yuan, transacted floor price of 37,485 yuan/m2, premium rate of 25.21%; and one in Hefei, located in the Shuxihu area of the High-tech Zone with a construction area of 68,900 square meters, total price of 1 billion yuan, transacted floor price of 14,508 yuan/m2, premium rate of 28.96%. Strong performance in self-financing and building business, synergistic development of "Greentown+" In August 2024, the company's self-financing and building management projects achieved a sales area of approximately 750,000 square meters, a year-on-year increase of 27.12%, and sales amount of 10 billion yuan, a year-on-year increase of 25.00%. From January to August 2024, Greentown Group's self-financed projects accumulated a contract sales area of 4.59 million square meters, with a contract sales amount of 61.1 billion yuan. Risk warning: Policy support below expectations, industry sales recovery below expectations, company financing below expectations.