Caitong: C&D INTL GROUP (01908) is recommended with a "buy" rating, high-quality real estate company moving steadily upwards.

Caitong releases report covering C&D INTL GROUP (01908) for the first time, giving it a "buy" rating. The company's net profit attributable to shareholders in the first half of 2025 increased by 11.8% year-on-year to 914 million yuan, with a continuing recovery in gross profit margin. The company's sales resilience is significant, with steadily increasing unit prices, mainly benefiting from its strategy of focusing on high-energy cities and flagship improvement products. The company increased its land acquisition efforts in the first half of the year, with a healthy and high-quality land reserve structure, continuing steady financial indicators, and further reduction in financing costs. It is expected that the company's net profit attributable to shareholders will be 49.8 billion yuan, 52.2 billion yuan, and 56.7 billion yuan for the years 2025-2027, with corresponding PE ratios of 6.9, 6.6, and 6.1 times. Key points from Caitong's analysis: Gross profit margin and net profit margin lead the way in recovery The company's profits lead the industry in turning the corner, with the gross profit margin rising to 13.3% in 2024 and 12.9% in the first half of 2025, a year-on-year increase of 1 percentage point, continuing the recovery trend. The company's net profit attributable to shareholders in the first half of 2025 was 9.14 billion yuan, up 11.8% year-on-year. Sales show resilience, unit price steadily rising In the first half of 2025, the company's total sales reached 70.7 billion yuan, a year-on-year increase of 7.1%. The sales price rose to 26,500 yuan per square meter, up 25% year-on-year, reflecting the company's positioning in high-energy cities and middle to high-end improvement products. The company focuses its sales in core areas such as Hangzhou, Fujian, Beijing, and Shanghai. Investment intensity increased, healthy land reserve structure In the first half of 2025, the company's land acquisition amount was 49.5 billion yuan, an increase of 17.9% year-on-year, with an investment intensity of 0.7 and an equity ratio maintained at a high of 76%. As of the first half of 2025, the company's land reserve area reached 127.1 million square meters, with a value of 249.6 billion yuan, of which land acquisition projects in 2024 and 2025 accounted for 19% and 35%, demonstrating that the company's land reserve structure is young and with less dead stock. Stable financial indicators, continuous decrease in financing costs The company continues to meet the "three red lines" green badge requirements, with a debt-to-asset ratio of 58.9%, a net debt ratio of 33.4%, and a cash-short-term debt ratio of 3.9 times as of 1H2025. The average financing cost in the first half of 2025 has decreased to 3.17%. Investment recommendation With a light historical burden, strong financials, and product strength, the company has capitalized on the current real estate cycle window to actively expand its scale and acquire quality land reserves, converting them into strong sales performance and ultimately achieving rapid growth. The company has already experienced a profit turning point, with the success of the Lighthouse project proving the long-term value of the company's products and promising future growth. Risk factors Continuous weakening of land acquisition intensity; relatively single business structure; risk of restricted stock lifting.