The 2021 quarterly report shows that the company's revenue is 22.13 billion (+ 24.3%), the net profit is 1.12 billion (+ 46.9%), the net profit after deducting non-return is 1.1 billion (+ 49.4%), the comprehensive gross profit margin is 31.3% (- 12.4pct), and the net profit rate is 8.3% (+ 0.1pct).

Event comment

The decline in the proportion of taxes and fees and credit impairment gains offset the impact of a sharp decline in gross profit margin, resulting in a year-on-year increase in performance in the first three quarters.

Revenue in the first three quarters of 2021 increased by 24.3% year-on-year to 22.13 billion, while the composite gross profit margin fell 12.4pct to 31.3% year-on-year. Although the gross profit margin fell sharply, the growth rate of net profit from home (+ 49.4%) was higher than that of revenue (+ 24.3%), mainly due to the decrease of 5.4pct, 1.1pct, 7.2pct, 9.2pct to 5.0%, 11.9%, 40.6% and 39.1% respectively compared with the same period last year. The asset impairment loss in the current period was 0 (a loss of 210 million in the same period last year). The credit impairment gain of 520 million (the impairment profit of 40 million in the same period last year), the decline in the proportion of taxes and fees, and the impairment profit offset the decline in gross profit margin, which contributed to a high increase in homing net profit in the first three quarters. Looking forward to the whole year, at the end of the third quarter of 2021, the amount received in advance is 46.3 billion (+ 13.3%), and the amount received in advance / 2021H annualized settlement = 1.37X, ensuring the settlement of late development income; the investment business is expected to grow steadily, contributing to the steady growth of the company's annual performance. The bottom of the company's performance has long been established, and the later performance is expected to continue to repair smoothly.

The growth rate of sales has slowed down, the acquisition of land is relatively active, and the land reserves are abundant to ensure the scale growth in the later period. In the first three quarters of 2021, the company's sales volume was 55.31 billion yuan (- 4.8%), the sales area was 293.0 million square meters (+ 24.0%), and the average sales price was 18877 yuan per square meter (- 23.2%) (sales data came from Kerry). The decline in average price may be related to the sinking of the company's layout of cities in recent years. In the first three quarters of 2021, the land acquisition amount was 30.9 billion yuan (+ 122.8%), the land construction area was 292.5 million square meters (- 28.8%), and the land acquisition area / sales area was 99.8% (- 74.0pct), of which Q3 land acquisition area / sales area was 69.8%. Although the land acquisition intensity decreased compared with the same period last year, it is still more positive compared with other companies in the industry. In the first three quarters of 2021, the company took an average land price of 10562 yuan per square meter, and the increase in floor price was related to the higher energy level of the city. 2021H company can sell 2465 million square meters of land storage, the annualized selling cycle is about 3.3 years, and the sales scale increases in the later stage.

The steady growth of investment property contributes to the growth of the company's performance. 2021H has opened 10 Dayue City + 1 Chunfeng Li + 1 Xiangyun Town + 3 management export projects, 12 self-supporting projects with a commercial area of about 1.88 million square meters (rentable area of 912500 square meters), with a rental rate of 94%. The rental income of the 2021H Shopping Center is 1.34 billion (+ 30%). Revenue from 2021H investment property and related services business also increased by 21.9% to 2.47 billion, with a gross profit margin of 65.2% (+ 3.3pct). It is expected that the company's investment property business is expected to maintain steady growth and contribute to performance growth in the later period.

Investment advice: with the gradual digestion of high-priced land in the early stage, the steady growth of holding property, and the settlement of high-quality land taken under the dual-platform mode, the company's performance has bottomed out and rebounded, and it is expected to continue to repair steadily in the later stage. It is forecast that the mother net profit is 16.6 trillion in 2021-2023, and the growth rate of performance in 2022-2023 is 11.7% and 13.3%, corresponding to a net profit of 8.5% and 7.6 pm in 2022-2023, which is rated as "overweight".

Risk hint

1. Gross profit margin of development business has fallen sharply

two。 Provision for large impairment losses on assets

3. The opening speed of the shopping center is not as fast as expected.

4. The profitability of the newly acquired project is lower than expected.