Summary:
Maintain the company's overweight rating. Revenue growth in 2021-2023 is expected to be 25.3%, 18.3% and 15.5% respectively, and expected performance growth is 14.3%, 16.6% and 14.9% respectively. It is estimated that the EPS in 2021-2023 will be 8.74,10.19,11.70 yuan respectively, and the company's current stock price will be 1.11x for 2021 PE, maintaining an overweight rating.
The company's sales continued to decline in November, and if the decline in sales shrinks in December, sales are expected to maintain a small increase for the whole year. In November 2021, the company achieved sales of 36.7 billion yuan, down 47.0% from the same period last year, and the sales area was 2.78 million square meters, down 46.2% from the same period last year. Sales growth fell 19.4pcts and 17.3pcts, respectively, compared with October, and fell sharply in November. In the first 11 months, the cumulative sales volume and sales area of the company increased by 5.6% and 2.5% respectively compared with the same period last year, which is faster than the cumulative growth rate of the previous 10 months. If the company's sales growth rate in December maintains the average since the third quarter, it is expected to achieve small growth for the whole year, but if the decline continues to increase in December and the year-on-year growth rate is lower than-53%, then there will be negative growth.
Continue to sell shares in KE Holdings Inc. and withdraw funds to optimize cash flow. Since June 2021, the company has sold its shares in KE Holdings Inc. one after another. Recently, the company has sold a total of 26.71 million KE Holdings Inc. American depositary shares at a total cost of about US $530 million, and the withdrawal of funds continues to optimize the company's cash flow. Since June, the company has sold a total of 45.35 million KE Holdings Inc. depositary shares, withdrawing a total of US $1.08 billion. Industry fundamentals are expected to bottom out in the fourth quarter, but 2022 is still a year under pressure. In the context of de-financialization, it is difficult to see twisting improvement in the financing side of real estate enterprises. if there is no continuous improvement on the demand side, then the downward sales will bring rebate and capital pressure, which is not conducive to the improvement of the supply and demand structure of the industry. it is also not conducive to the stable development and virtuous circle of the industry. As a result, a new round of policy support is expected in the first quarter of 2022, bringing improved demand and downside risks.
Risk hint: the market demand is falling faster than expected, and the development of the culture and travel plate is not as expected.