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LONGFOR GROUP(960)
Analysis¡G
On the news front, the State Council Information Office will hold a press conference at 10:00 a.m. on October 17th. Minister of Housing and Urban-Rural Development Ni Hong, as well as officials from the Ministry of Finance, the Ministry of Natural Resources, the People`s Bank of China, and the China Banking and Insurance Regulatory Commission, will introduce the relevant situation regarding the promotion of stable and healthy development of the real estate market and answer questions from reporters. Since late September, there have been continuous favorable policies in the real estate sector. On September 24th, the People`s Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and other departments introduced a series of heavyweight policies, including reserve requirement ratio cuts, policy rate cuts, reduced interest rates on existing house loans, lowered down payment ratios for second homes, increased central fund support for refinancing, and the continuation of the "16 financial policies", among others. Earlier on October 12th, the Ministry of Finance announced a package of fiscal increment policies, including the use of special bonds, special funds, tax policies, and other tools to support the real estate market. Since 1998, Longfor Properties has developed over 1,200 projects, with a total construction area exceeding 230 million square meters, delivering one million housing units. It has been ranked among the "Top 10 Comprehensive Strength Real Estate Development Enterprises in China" for 13 consecutive years. Longfor Properties focuses on creating meticulously crafted living spaces, producing benchmark products such as Yunhe Song, Yu Lake Realm, Guan Cui, Lightyear, and Platinum Island, with its quality construction highly recognized both within and outside the industry.
Strategy¡G
Buy-in Price: $13.82, Target Price: $15.21, Cut Loss Price: $12.45
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Report Review of August 2024
Sectors: TMT, Semiconductors, Consumer & Healthcare ¡]Eric Li¡^ TMT, Semiconductors, Consumer & Healthcare ¡]Eric Li¡^This month I released reports of 361 DEGREES INT. (1361.HK). During 2023FY, 361 Degrees International Limited (361 Degrees) recorded a revenue of RMB8,423.3mn, increasing 21.0% YoY. Profit attributable to the equity shareholders of the Company was RMB961mn, representing a YoY increase of 28.7%. A total dividend of HK20.4 cents per ordinary share (equivalent to RMB18.7 cents), representing a dividend payout ratio of 40.2%. In terms of product segment, sales of the company's two core product lines, namely footwear and apparel, increased by 23.0% YoY and 9.8% YoY respectively. For the year under review, the proportions of total revenue of footwear and apparel sales were slightly increased from 41.0% to 41.7% YoY and slightly decreased from 35.2% to 31.9% YoY of the total revenue respectively. This was mainly due to the increase in proportion of sales revenue from 361 Degrees Kids from 20.7% to 23.2% of the total revenue for the year under review, which in turn affected the proportion of sales of various products to total revenue. The average wholesale price (AWP) of footwear and apparel edged up by 3.0% and 0.5% year-on-year respectively. The increase in footwear's and apparel's AWP was mainly due to the upward adjustments of the wholesale prices of the existing products across different product lines in order to cover the increase in cost of production and reflect the continuous brand image enhancement; the upgrade of product mix by launching a variety of new products with a higher AWP; and the increase in proportion of sales revenue generated from the e-commerce business which has a higher AWP than the sales made to distributors, above reasons contributed to increase in AWP as compared to that of last year. In addition, the sales volume of footwear and apparel products increased by 19.4% and 9.4% YoY, respectively. In recent years, as China's consumer preferences leaned towards specialisation, diversification, and cost effectiveness, the company positions as a "professional, youthful, and internationalised" brand. The company has built a diversified brand matrix based on professional functions and its own-branded IP. With 2024 bringing numerous international and domestic sports events, including the highly anticipated Paris Olympics, which are expected to stimulate a broader participation in sports and increase consumer demand. We expect 2024-2025 EPS to be RMB0.49 and RMB0.53 respectively, with PT of HKD4.02, implies a FY2024E P/E of 7.47x (~2-yrs historical average). Our investment rating is ¡§Accumulate¡¨. 
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