incident. The company published its 2021 semi-annual report. During the reporting period, the company achieved operating income of 73.401 billion yuan, an increase of 13.7% over the previous year; net profit attributable to shareholders of listed companies was about 6.283 billion yuan, an increase of 19.3% over the previous year; and the board of directors declared an interim dividend of HK$0.7 per share.
The company's revenue mainly includes property sales, commercial operations, hotel operations and property management businesses. As of the first half of 2021, the company's revenue reached RMB 73.4 billion, an increase of 13.7% over RMB 64.55 billion in the same period in 2020. Property sales revenue during the period was RMB 66.52 billion, accounting for 90.6% of total revenue, up 8.2% over the same period in 2020. The recorded sales area for the first half of 2021 was 4,052 million square meters, an increase of 2.6% over the same period in 2020; the average recorded sales price was RMB 16,416 per square meter (excluding tax).
According to the company's 2021 semi-annual report, (1) The contract amount for the first half of 2021 was RMB 152,795 billion, an increase of 38.3% over the previous year. The contract area increased from 6.298 million square meters in the same period in 2020 to 8.61 million square meters in the first half of 2021, an increase of 36.7% over the previous year. (2) As of June 30, 2021, the company's land reserves were approximately 72.83 million square meters (before equity); in the first half of 2021, the company added 3.1 million square meters of land reserves (before equity). (3) The company expects saleable resources to reach 2004 million square meters in the second half of 2021, with a saleable value of 360 billion yuan. Among them, Tier 1, 2 and 3 tier 3 cities will account for 88%, and will account for 75% within a year. It has a core regional layout and structural advantages. Shimao is confident that it will achieve the annual sales target of RMB 330 billion.
The majority shareholders of the company increased their holdings of the company by 6.8625 million shares in the market several times from January to July 2021, involving approximately HK$142 million, which fully demonstrates that the majority shareholders have firm confidence in the company's overall business development and growth. Additionally, the company has repurchased 4 million company shares in July 2021.
Investment advice: Launch the “Big Aircraft Strategy” strategy, “better than the market” rating. The company actively promotes the diversified business layout of the “Big Aircraft Strategy”, with property development as the core body; commercial operations, hotel operations and property management as solid wings; and investment in high technology, health care, education, pension, culture, etc. as the key to balanced development. The company's 2021-2022 EPS is expected to be 4.20 yuan and 4.81 yuan respectively. Considering that the company is a real estate leader with comprehensive diversified business development, we gave the company 4-5 times dynamic PE in 2021. The corresponding reasonable value range for the next 6 months was HK$20.23-25.29 (RMB 16.8-21.0, HKD exchange rate of RMB 0.83039 per HKD), giving it a “superior market” rating.
Risk warning: The company faces the risk of policy regulation and sales falling short of expectations.