Revenue soared, and net profit after deducting non-return to the mother fell 13.24%. The company achieved total operating income of 43.973 billion yuan in the first half of 2021, an increase of 45.10% over the previous year; realized net profit attributable to shareholders of listed companies of 3.705 billion yuan, an increase of 2.49% over the previous year; realized net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was 2,850 million yuan, down 13.24% from the previous year; and achieved earnings per diluted share of 0.67 yuan, the same as the previous year. In terms of revenue composition, real estate sales and operations accounted for 90.44% of revenue, an increase of 41.20% over the previous year; lifestyle services accounted for 4.25% of operating income, an increase of 82.08% over the previous year; other businesses accounted for 5.31% of revenue, an increase of 109.84% over the previous year.
Gross margin declined markedly, and the proportion of three expenses was optimized. 2021H1 achieved a gross profit margin of 20.14%, down 5.81 percentage points from the previous year; the net interest rate was 8.43%, down 3.50 percentage points from the previous year; the three expenses accounted for 7.10% of revenue, down 0.9 percentage points from the previous year; and ROE (dilution) was 9.34%, down 2.87 percentage points from the previous year.
Operating cash flow turned positive, and the three red lines turned green. By the end of 202H1, the company's total assets reached 395.6 billion yuan, an increase of 7.73% over the previous year; the balance ratio was 80.40%, a decrease of 3.5 percentage points over the previous year; and the amount of cash flow from operating activities was 2,514 billion yuan, which was corrected year on year. The company's net debt ratio fell to 77.08%, the balance ratio fell to 69.55% after deducting contract debt, and the short-term cash debt ratio reached 1.38. The “three red line” monitoring indicators met the “green range”. The credit ratings of company entities have been steadily improving. Mainstream domestic rating agencies have given AAA ratings, S&P International's ratings have been upgraded from B+ to BB-, and Moody's International's ratings have been steadily raised from B1 outlook to B1 outlook positive.
There was a slight increase in monetary cash, and the scale of interest payments actively declined. As of the end of 202H1, the company's monetary capital balance was about 37 billion yuan, an increase of 0.73% over the previous year. The company took the initiative to reduce the interest rate to 94.144 billion yuan, a significant decrease compared to 110.605 billion yuan in the same period last year; of these, interest-bearing debt maturing within one year accounted for 28.47%, within one to three years, and 15.80% for more than three years.
Sales grew steadily, and the payback rate reached 97%. 2021H1 achieved full-caliber sales of 102.5 billion yuan, an increase of 18% over the previous year; sales area of 1.05 million square meters, an increase of 17% over the previous year; and achieved sales repayment of 99.7 billion yuan, with a repayment ratio of 97%. Among them, sales in East China, Chongqing, Southwest China (excluding Chongqing), Central China, and South China accounted for 43%, 20%, 12%, 11%, and 8% respectively, and the regional layout is becoming more and more reasonable.
Risk warning: 1) the risk that the company's sales growth will not meet expectations; 2) there will be a sharp decline in housing prices; 3) shareholder changes.
Land acquisition is diversified, and the distribution of saleable resources is more balanced. 2021H1 added 39 new land reserves. The amount of land purchase contracts reached 35.4 billion yuan, the estimated construction area was 8.35 million square meters, the average floor unit price was 4,240 yuan/square meter, and the investment to sales ratio was kept within 40%. The planned construction area of land acquired by the company through “real estate+commerce”, “real estate+industry”, mergers and acquisitions reached 4.72 million square meters, accounting for 57%. By the end of 202H1, the company could sell 73.11 million square meters of resources, of which Chongqing's share fell to 23.69%. East China, Southwest China (excluding Chongqing), Central China, South China, and North China accounted for 20.94%, 18.30%, 17.81%, 9.22%, and 5.27% respectively.
Investment advice: Maintaining a “better than the market” rating
The three red lines of Jinke Co., Ltd. have remained on the green line, sales have grown steadily, and the distribution of land storage has become more balanced. Considering the significant decline in the company's 2021H1 gross profit margin, we have adjusted our profit forecast. The company's operating income for 2021 and 2022 is estimated to be 112.319 billion yuan and 139.467 billion yuan respectively, and net profit of the mother is 7.507 billion yuan and 8.539 billion yuan respectively. The corresponding EPS is 1.41 yuan and 1.60 yuan respectively. Based on the company's closing price of 5.11 yuan on September 2, 2021, the corresponding PE for 2021 and 2022 was 3.63 times and 3.20 times. We gave the company 5-5.5XPE in 2021, with a reasonable value range of 7.03-7.73 yuan, maintaining the “superior market” rating.