Revenue continues to grow, and profit margins have declined slightly
In the first half of 2021, the company achieved operating income of 34.2 billion yuan, an increase of 30.9% over the previous year; Guimu's net profit was 2.5 billion yuan, a decrease of 14.0% over the previous year, lower than expected. The main reason for the increase in revenue and profit is that the company's gross margin declined in line with industry trends and the share of profit and loss of minority shareholders increased.
Sales have increased steadily, and the structure is balanced, and sufficient land acquisition is prudent
The company's sales are good, and the regional structure is becoming more and more balanced. In the first half of 2021, the company achieved a contract amount of 59.9 billion yuan, an increase of 24.3% over the previous year, and completed 46% of the annual contract plan; the contract area was 5.17 million square meters, an increase of 19.0% over the previous year. Among them, the Yangtze River Delta region accounted for 36.2% of the contract amount and was the highest region, and the adverse impact of Beijing on the company's development was manageable.
The company has sufficient land reserves and is cautious in acquiring land. In the first half of 2021, the company added 3.03 million square meters of land storage space, of which the Yangtze River Delta accounted for 39.2% of the value of goods. Land purchase expenses amounted to 12.3 billion yuan, accounting for 21% of the company's contracted sales. As of mid-2021, the company's total land storage area was 37.41 million square meters, which can meet the company's development needs for 2-3 years.
Financial performance continues to improve, and full compliance of the three red lines is expected
According to the “three red lines” requirement, the company is currently in the yellow zone and is in sight to fully meet the standards. As of mid-2021, the company's short-term cash debt ratio was 1.2, and the net debt ratio was 66.5%, down 13.7 percentage points from the beginning of the period. The balance ratio after excluding prepaid accounts was 70.8%, down 3.0 percentage points from the beginning of the period.
Operating conditions are stable, finances are improving continuously, maintaining the stable operating conditions of “buy” rating companies, financial performance continues to improve, and the regional structure of the company's sales and land storage is becoming more and more balanced. The adverse effects of Huanjing on the company's development are manageable. Net profit returned to the mother in 2021 and 2022 is expected to be 7.5 and 7.7 billion yuan respectively, corresponding EPS is 1.73 and 1.78 yuan, and PE corresponding to the latest stock price is 2.9 and 2.8 times, maintaining the “buy” rating.
risks
1. The company's property development sales and settlement fell short of expectations; 2. The company's profit level continued to decline.