Performance to achieve high-quality growth, sales performance is eye-catching. In the first half of 2021, the company achieved operating income of 73.4 billion yuan, an increase of 13.7% over the same period last year, and realized profit attributable to shareholders of 12.63 billion yuan, an increase of 15.9% over the same period last The main reasons why the growth rate of shareholders' profit attributable to the company during the period is higher than the revenue growth rate is as follows: 1. The ability of cost control has been improved, and the rate of sales management expenses has decreased to 3.6% from 3.8% in the same period last year. At the same time, financial expenses have decreased by 27.9% to 920 million yuan compared with the same period last year; 2. The fair value of investment property has increased by 72.8% to 530 million yuan over the same period last year. Although the company's gross profit margin fell to 28.6% from 30.2% in the same period last year, the company's gross profit margin fell lower and remained at a high level in the context of a sharp drop in the gross margin level of the industry as a whole this year. The company achieved contract sales of 152.8 billion yuan for the whole year, an increase of 38.3% over the same period last year, and achieved the annual 330 billion sales target of about 46.3%. The salable value of the company in the first and second half of 2021 is about 360 billion yuan, of which the salable value of first-and second-tier and strong third-tier cities accounts for 88%. The dynamic removal rate of 49% in the second half of the year can achieve the annual sales target of 330 billion yuan.
Strictly observe investment discipline and upgrade the sound rating of financing. In the first half of 2021, the company acquired a total of 19 pieces of land, totaling 20.1 billion yuan, down 68.9% from the same period last year; the amount of land acquired accounted for 13.2% of the sales amount, down 45.4% from the same period last year. As of June 30, 2021, the total construction area of the company has reached 7283 million square meters, with a total value of more than 1.18 trillion yuan. The company continues a sound financial strategy. The net debt ratio in the first half of the year was 50.9%, maintaining a healthy level of less than 60% for the tenth year in a row. The real debt ratio and cash-to-short debt ratio are 68.0% and 1.19 respectively, keeping the company in the "green" real estate enterprise range.
Weighted financing costs were 5.6 per cent, the same as in the same period last year. Thanks to the company's sound business style, S & P raised its outlook for the company's credit rating from stable to investment grade in the first half of the year.
Diversified business to achieve high growth, highlighting the strategic forward-looking strength. In the first half of the year, the revenue of Shimao's hotel, entertainment and property professional companies totaled 6.88 billion yuan, an increase of 121.9% over the same period last year, accounting for 9.0% of revenue, an increase of 4.6% over the same period last year.
Maintain earnings forecasts and buy ratings. We forecast that the company's EPS for 2021-2023 will be 4.13 USD 4.76pm 5.19 respectively, maintaining the buy rating and the target price of HK $37.51 unchanged.
Risk hints: industry regulation and control policies exceed expectations; the development of the epidemic exceeds expectations and affects sales.