Agile's income rose 15.1 per cent in the first half of 2021 compared with the same period last year, and gross profit margin returned to the normal level of 28.1 per cent from last year's relatively high level. Thanks to the impact of the proceeds from the sale of project interests on the decline in gross profit margin, the net profit of returning home rose 3.2 per cent to 5.29 billion yuan. A dividend of HK $0.5 per share is proposed for the first half of the year, the same as in the same period last year. Agile continues to optimize its asset structure and become a green housing enterprise. In the first half of 2021, 22 new projects were purchased, mainly mergers and acquisitions, urban renewal and urban integration. As of June 2021, the total saleable value of land reserves is estimated to be about 860 billion yuan. We like Agile's diversified business development and effectively disperse the policy risks of the real estate sector. as property management, environmental protection, agent construction and other businesses become more mature, the cash flow is expected to become more and more stable. Maintain a "buy" rating.
Summary of the report
Gross profit margin fell back to the normal level of the industry. Agile's revenue rose 15.1 per cent to 38.59 billion yuan in the first half of 2021 compared with the same period last year. Affected by the carry-over delivery structure, gross profit margin returned to the normal level of 28.1% from last year's relatively high level, while gross profit fell 5.8% to 10.85 billion yuan compared with the same period last year. The ratio of management expenditure to income is about 8.2%, which is basically the same as that of the same period last year. However, the company packaged and sold part of its stakes in seven real estate projects to Ping an Real Estate, and the impact of the proceeds from the sale of project interests on the decline in gross profit margin increased by 3.2% to 5.29 billion yuan. A dividend of HK $0.5 per share is proposed for the first half of the year, the same as in the same period last year.
To become a green housing enterprise. As of June 2021, Agile had total assets of about 330 billion yuan and total debt of about 253 billion yuan. After deducting contractual liabilities from clients, the debt-to-asset ratio was about 68%, an improvement of about 4 percentage points from 72% at the end of last year and lower than the required 70%. The unrestricted cash is about 46.5 billion yuan, the interest-bearing debt due within one year is about 39.5 billion yuan, and the cash-to-debt ratio is about 118%, which is better than the prescribed 100%. The total interest-bearing liabilities and net debts are 97.9 billion yuan and 40.7 billion yuan respectively, the total equity is about 90 billion yuan, and the net leverage ratio is about 45.3%, which is lower than the required 100%. Agile three new financing rules and indicators can be qualified, promoted to green housing enterprises, the overall asset leverage risk is low.
The integration of production and city locks in land resources. The company purchased 22 new projects in the first half of 2021, with a total construction area of about 3.4 million square meters. In terms of area, about 48% come from urban renewal and production-city integration, 30% from auctions, and 22% from mergers and acquisitions. As of June 2021, the total land storage is about 5300 million square meters, with an estimated sales value of about 860 billion yuan. In addition, the integration resources of production and city are about 2400 million square meters, and the resources of urban renewal are about 1380 million square meters. Together with the existing land reserves, the total value of goods is estimated to be about 1.6 trillion yuan. The average ratio of land to goods is about 30%, which is mainly concentrated in the Great Bay area, the central and western regions and the Yangtze River Delta. The company's contract sales in the first half of 2021 were about 75.3 billion yuan, an increase of 36.7% over the same period last year, similar to the average growth of the top 100 housing enterprises. The company maintains its sales target of 150 billion yuan in 2021.
Maintain a "buy" rating. The long-term policy of not speculating in housing remains the same, and we like the diversified business development of Agile, which effectively disperses the policy risks of the real estate sector. Among them, the elegant life of the property management plate puts forward the medium-term goal of 40 billion revenue in 2025. In addition, the business of environmental protection and agent construction is becoming more and more mature, which will further optimize the group's profit structure, and the cash flow is expected to become more and more stable. Maintain the buy rating. However, policy risks in the real estate sector remain a major haze for capital markets, and short-term sector valuations remain under pressure.
Risk tips: monetary tightening affects sales; domestic regulation and control efforts are upgraded