Events:
The company released a semi-annual report that the total revenue of 2021H1 was 38.48 billion yuan, an increase of 29.6% over the same period last year, and the net profit attributed to the parent company was 1.75 billion yuan, a decrease of 14.7% over The contract sales volume was 108.99 billion yuan, an increase of 33.9% over the same period last year. The contract sales area was about 7.901 million square meters, and the average contract price was about 13793 yuan per square meter.
During the reporting period, affected by the settlement project structure, the company's net profit growth slowed down, but the company positioned high-quality growth, carefully acquired land, and the cash flow situation improved.
Investment Summary:
The real estate business income reached 27.38 billion yuan, accounting for 68.3% of the total income. The company's "real estate + construction"
With two-wheel drive, revenue from real estate, construction and other businesses accounted for 68.3%, 28.3% and 3.4% respectively, with year-on-year growth rates of 31.5%, 17.2% and-19.7%, respectively. First-and second-tier cities account for 36% of real estate sales.
Affected by the settlement structure, net profit decreased by 14.7% compared with the same period last year. The net profit of the shareholders of 2021H1 Company belonging to the listed company is 1.75 billion yuan, mainly due to the decrease in the settlement of non-consolidated items, resulting in an investment income of 680 million yuan, a decrease of 62% compared with the same period last year. As a result, net profit margin fell 2.36 percentage points year-on-year to 4.54%.
The completion plan is concentrated in the second half of the year, ensuring full-year growth. The completed area of 2021H1 is 3.95 million square meters, down 25% from the same period last year, and 32% of the planned completion for the whole year. The new construction area was 5.41 million square meters, down 5.9% from the same period last year, and 58% of the planned start for the whole year.
Take the land carefully, and the soil storage focuses on the Yangtze River Delta. In the first half of 2021, the company added 41 new projects, with a planned construction area of 6.999 million square meters, an average land acquisition cost of 4136 yuan per square meter, and a total equity land price of 28.948 billion yuan, compared with 108.99 billion yuan in sales in the first half of the year. 41 new projects were added, with 78% of the third-and fourth-tier cities in terms of area and 40% of the Yangtze River Delta.
The new rules on land premium rate in the second half of the year are expected to optimize the company's soil storage structure. On the afternoon of August 10, 2021, the Tianjin Bureau of Planning and Natural Resources issued a supplementary announcement on the listing and transfer of the right to the use of state-owned construction land in Tianjin. The maximum premium rate was reduced to no more than 15%. After reaching the peak, the lottery mechanism was activated. The company took the land cautiously in the first half of the year, laying the foundation for the new planning and optimization of soil storage structure in the second half
Step on one of the "three red lines" and be in the "yellow file". As of 2021H1, the company had a net debt ratio of 95.27% and a cash-to-short-loan ratio of 1.03. Only excluding advance receipts, the asset-liability ratio does not meet the requirement of less than 70 per cent, with 2021H1 of 77.42 per cent, down 1.27 percentage points from the end of 2020.
The cash flow is good. The inflow of operating cash was 76.44 billion yuan, an increase of 12.1% over the same period last year, which was 3.6 times the amount of interest-bearing liabilities due within one year, of which cash received from the sale of goods and services was 52.66 billion yuan, an increase of 30.6% over the same period last year. The net cash flow generated by business activities was 2.41 billion yuan, an increase of 18.5% over the same period last year, and remained positive.
Gross profit margin and period expense rate remained stable. The company's comprehensive gross profit margin was 16.31%, down 0.97 percentage points from the same period last year. The sales expense rate, management expense rate and sales expense rate were 2.5%, 4.59% and 1.49% respectively, with year-on-year changes of 0.14, 0.37 and-0.03 percentage points, which remained stable as a whole.
Investment strategy: under the current "three red lines", "two concentration" and other industry policies, Central and South China Construction adopts the strategy of high-quality development and carefully acquires land to ensure that the company's cash flow is good. We estimate that the operating income of the company in 2021 and 2023 will be 98.3 billion yuan, 114.9 billion yuan and 138.9 billion yuan respectively, and the net profit belonging to the shareholders of the listed company will be 8.1 billion yuan, 9.5 billion yuan and 12 billion yuan respectively, and the earnings per share will be 2.13,2.5,3.15 yuan respectively, and the corresponding PE will be 2.15,1.84,1.46 times respectively. Maintain a "buy" rating.
Risk tips: the risk of sales falling short of expectations, the risk of real estate policy regulation and control, and the risk of repeated epidemic.