Core point of view
The company released the China report on August 26, with a revenue of 38.48 billion yuan, a year-on-year + 29.6%, and a net profit of 1.75 billion yuan, a year-on-year net profit of-14.7% SPS 0.46 yuan. The scale of the company is growing steadily and the financing structure is optimized. We estimate that the EPS in 2021-2023 will be 2.13,2.35,2.64 yuan (the previous values are 2.36,2.51 and 2.78 yuan respectively), and the average 21PE of reference comparable companies will be 4.5x (Wind consensus expectations). We will give 21-year PE4.5x with a target price of 9.59 yuan, maintaining the "buy" rating.
The high growth of settlement, the decline of non-consolidated income and the contraction of gross profit margin led to the settlement income of real estate during the non-profit period + 31.5% to 27.38 billion yuan compared with the same period last year, promoting the rapid growth of revenue. There are two main reasons for not increasing profits: the decline in non-consolidated income leads to investment income of-62% year-on-year, a decrease of 1.1 billion; the gross profit margin of real estate settlement is from-0.34pct to 19.1% year-on-year, while the gross profit margin of construction business is from-2.8pct to 8.3% year-on-year, resulting in a comprehensive gross profit margin of-1pct to 16.3% year-on-year. The outstanding revenue sold at the end of the period was 128.8 billion, a further + 7% compared with the end of 20 years, laying the foundation for further income growth for the whole year.
Implement the quick turnover strategy, and the intensity of land acquisition has decreased.
During the period, the company achieved a sales area of 790.1 million square meters and sales of 108.98 billion yuan, which were + 29.7% and + 339% respectively compared with the same period last year. The intensity of land acquisition has declined, with land acquisition / sales of 27%, compared with 20 years-7pct. As of the end of the period, the company's unsettled total land storage was 4740 million square meters, + 7.5% of the same period last year. From the progress of the project, the unstarted area accounted for 33%; in terms of urban energy level, first-and second-tier cities accounted for 33%, compared with the end of 20 years-3pct. On the whole, the pace of the company's expansion is steady.
The scale of interest-bearing liabilities declined further, and financing costs improved in the third quarter. At the end of the period, the company's financial structure remained "yellow", with interest-bearing liabilities of only 76.8 billion, up from-3.9% at the end of the year. At the end of the period, the net debt ratio was 95.3%, compared with the end of 20 years-2.0pct, cash short debt ratio of 1.29, deducting restricted funds compared with cash short debt at the end of 20 years-1pct to 1.03. The asset-liability ratio deducting the amount received in advance is 77.4%, which is higher than that at the end of 20 years-1.3pct. As of August 26, the company has issued 1 billion corporate bonds and 1 billion successful votes at a cost of 7.3% and 6.8% respectively. The winning interest rate issued in July has improved compared with the same maturity debt cost-0.4pct in the second half of 20 years, and the financing cost has improved.
High dividend yield strengthens allocation value and maintains "buy" rating
Due to the fact that the company's non-consolidated business income is lower than we expected, we expect the EPS to be 2.13,2.35,2.64 yuan (the previous values are 2.36,2.51 and 2.78 yuan respectively) in 2021-2023, and the average 21PE of the comparable company is 4.5x (consistent Wind expectations). The company's size is growing steadily, the financing structure is optimized, and the dividend yield is as high as 10.9% (the closing price on August 26). We give it a 21-year PE4.5x with a target price of 9.59 yuan (the previous value is 12.73 yuan) and maintain a "buy" rating.
Risk tips: industry policy and fundamental risk; tight capital chain risk.