2021H1's performance is in line with market expectations: the company's 2021H1 operating income is 12.97 billion yuan (the same below), an increase of 0.29% over the same period last year; the core net profit is 3.33 billion yuan, an increase of 4.6% over the same period last year; and the core net profit margin is 25.6%, which is higher than the industry average. The company pays a rich and stable dividend. 2021H1 pays 0.37 yuan, with a dividend rate of 35.4%. The performance is in line with market expectations.
Urban renewal projects in the Greater Bay area continue to transform: as of 2021H1, the company's rights and interests land storage reached 1594 million square meters, with a total land storage of about 2560 million square meters, of which three urban renewal projects have won the bid, locking in 2.4 million square meters of land storage and a saleable value of 123 billion yuan, providing strong support for the land storage in the Dawan area. The company has rich reserves in urban renewal projects and is promoting 36 projects, with an estimated total salable value of 839.7 billion yuan and a total salable area of 2321 million square meters. Five new villages are expected to win the bid in the second half of the year, and continue to replenish high-quality and low-cost soil reserves. lay the foundation for the company to maintain a high profit margin in the future.
Diversified layout, investment property has entered the harvest period: 2021H1, the company's rental income is 901 million yuan, an increase of 55% over the same period last year, mainly because the rental rate of investment property has been stable and the operating profit margin has increased steadily. As of 2021H1, the company has opened 41 investment projects, including 10 shopping malls, 9 office buildings and 22 hotels, with sufficient project reserves, 25 shopping mall projects and 11 office projects, which are expected to create a stable and sustained cash inflow for the company in the future.
Contract sales increased significantly: 2021H1, the company's contract sales of 56.2 billion yuan, an increase of 52.8% over the same period last year, achieving 45.3% of the annual sales target. The sales value of the company in the second half of the year is 123 billion yuan, and the annual sales target can be achieved by 55% removal rate.
The debt structure has been optimized and the net debt ratio has dropped significantly: as of 2021H1, the company's net debt ratio was 54.1%, down 7.6% from the end of 2020, and the average financing cost was 6.1%, down 0.1% from the end of 2020.
Our point of view: the company's three red line indicators continue to optimize, the average financing cost continues to decline, and the financial situation is further optimized. 2021H1, the company maintains rapid sales growth, continues to replenish low-cost, high-quality land reserves through urban renewal projects, and investment properties enter the harvest period, the company is expected to continue to maintain above-average growth and gross profit margin. The company's current share price is 4.6 times the 2020 PE, and the current share price is 13.6% of the 2020 dividend yield.
Risk tips: macroeconomic growth slows; industry regulation and control policies tighten; liquidity tightens; company sales fall short of expectations; RMB depreciates.