Items:
Kaisa Group released its semi-annual report for 2021, with revenue of 30.07 billion yuan, an increase of 34.8% over the same period last year, and a net profit of 3 billion yuan, an increase of 8.5% over the same period last year. The company intends to pay an interim dividend of HK4 cents per share.
Safety point of view:
The performance rose steadily, and the fine operation effect showed: 2021H1 achieved revenue of 30.07 billion yuan, an increase of 34.8% over the same period last year, and a net profit of 3 billion yuan, an increase of 8.5% over the same period last year. During the period, the comprehensive gross profit margin fell 2.9 percentage points year-on-year to 30.9%, and the absolute scale was still at a high level in the industry; the sales expense rate and management expense rate decreased by 0.8% and 0.9% to 2.5% and 4.8% respectively compared with the same period last year. 2021H1's overall net interest rate was 10.2%, down 0.4% from the same period last year.
Sales are growing rapidly and soil reserves are excellent: 2021H1's contract sales of 63.85 billion yuan, an increase of 77.2 percent over the same period last year, has achieved the annual sales target of 49.1 percent, and the sales area is 380.6 square meters, an increase of 79.6 percent over the same period last year. Among them, Dawan sales in Guangdong, Hong Kong and Macao accounted for 51%. The sales value is expected to be 127 billion yuan in the second half of the year, and the annual target can be achieved with a removal rate of 52%. At the end of the period, the land storage area is 3114 square meters, with a goods value of 734.66 billion yuan. In terms of goods value, the Greater Bay area accounts for 76% and first-tier cities account for 54%, providing a guarantee for high-quality development.
The speed of urban renewal transformation has been accelerated, and three red lines and green files have reached the standard: 2021H1 urban renewal has been successfully transformed into three projects, with a salable area of 1.13 million square meters and a saleable value of 72.7 billion yuan. Urban renewal accounts for nearly half of the total land storage value at the end of the period, accounting for 47%. At the end of 2021H1, urban renewal did not include a total of 213 soil storage projects, covering an area of 5370 million square meters, basically located in the Dawan area, of which Shenzhen accounted for 28% and Guangzhou accounted for 45%. At the end of the period, the comprehensive financing cost maintained 8.7%; the net debt ratio, excluding advance receipts, the asset-liability ratio was 93.7%, 69.9%, and the cash short-debt ratio was 1.53 times. The three red lines and green files reached the standard.
Investment suggestion: maintain the original profit forecast, and there will be stock options exercised during the period. According to the latest share capital, the EPS of the company from 2021 to 2023 is expected to be 0.93,1.14,1.36 yuan respectively, and the current share price corresponding to PE is 2.1,1.7,1.4 times respectively. The company has deep layout Guangdong-Hong Kong-Macau Greater Bay Area, sufficient soil storage to support the supply of goods, and high-quality layout to enhance the margin of safety. at the same time, as a forerunner of urban renewal, with rich experience in old reserve and operation, it is expected to fully benefit from policy promotion and continuously improve the speed of conversion. maintain a "recommended" rating.
Risk hints: 1) if the regulation and control of the property market in key cities exceeds expectations, it will lead to sales in exchange for price, bringing the risk of further decline in the company's settlement gross profit margin and impairment of high-priced land in the early stage; 2) if the financial supervision of the industry is further tightened, it will have a negative impact on the development of the company's size. 3) due to the strong personalization of urban renewal projects and the time required is generally longer than bidding, the company may face the risk that the progress of the project is lower than expected in the process of urban renewal and development.