Event: on January 4, 2022, Greentown China released sales data for 2021, and the group's total full-caliber sales increased by 21% over the same period last year, of which self-investment projects increased by 24% compared with the same period last year.
Sales grew by more than 20%, achieving the target for the whole year ahead of schedule.
In 2021, Greentown China achieved full-caliber total sales of 350.9 billion yuan (YoY+21%), total sales area of 15.57 million m2 (YoY+12%), and average sales price of 22537 yuan / m2 (YoY+8%). Among them, the company's self-investment project sales of 266.6 billion yuan (YoY+24%), equity sales of 145.2 billion yuan (YoY+87%), equity ratio of 54%; agent construction project sales amount of 84.3 billion yuan (YoY+13%).
The company overfulfilled its annual sales target of 310 billion yuan ahead of schedule in November 2021, reflecting the company's high-quality product power, excellent pushing ability and effective marketing strategy.
Deepen the urban ploughing strategy and increase the value of new goods to a new high
The company actively increases land reserves, according to the caliber of the amount of rights and interests, the ratio of land to sales in 2021 is 67%. According to the data of the middle index, the amount of land held by companies in 2021 was 96.9 billion yuan (YoY+9%), ranking sixth; the value of new goods exceeded 300 billion yuan, climbing a new high, ranking fourth.
In terms of regional layout, the company adheres to the deep ploughing strategy, and the project is mainly located in the core cities with high security. In terms of total floor area, as of the first half of 2021, 52% of the company's land reserves were located in the Yangtze River Delta; 27% of the reserves were in Hangzhou, and five new projects were added in Hangzhou in the second half of the year. We believe that the company's performance will maintain steady growth. On the one hand, the record high value of new goods will lay the foundation for revenue growth, on the other hand, ploughing Zhejiang and the core first-and second-tier cities will enable the company to sell quickly.
The debt structure has been optimized, and financing costs have continued to decline.
In the first half of 2021, Greentown China's weighted average interest cost was 4.6%, down 30bp from the end of 2020. In December 2021, Moody's released a report to maintain the company's "Ba3" rating and look forward to "stability". In the same month, the company's subsidiary issued 2 billion yuan of three-year medium-term bills with a coupon of only 3.68%, which can further reduce comprehensive financing costs.
Under the background that the narrowing of the real estate price gap leads to the decline of the overall profit margin of the industry, the downward financing cost helps to improve the profit margin and consolidate the cost advantage.
Strengthen the construction of digitalization and improve the quality of management
Through digital transformation, the company can improve the quality of operation. In 2021, the company built a digital large and medium-sized platform, using digital analysis of sales data and customer demand, won the "2021 Real Estate Industry Best Digital Innovation leading Enterprise Award".
With the leading product quality and excellent pushing ability, Greentown China sales growth rate of more than 20%. Based on the company's new goods value reaching a record high and insisting on ploughing the core cities, we believe that the company's future performance will continue to grow at a high speed. We expect the company to achieve operating income of 83.7 billion, 107.5 billion and 139.9 billion from 2021 to 2023, up 27%, 28% and 30% year-on-year, and realize net profit attributable to the parent company of 4.4 billion, 5.1 billion and 6.2 billion, up 15%, 17% and 21% year-on-year.
At present, the Hang Seng property Index trades at 8.0 times earnings, and the company's current share price is 5.3 times its 2021 performance. Compared with comparable housing companies of the same sales scale, the company has a higher growth rate in the next three years and has a certain valuation advantage. Maintain a "buy" rating.
Risk hints: the financing environment tightens more than expected, real estate regulation and control policies tighten more than expected, double centralized transfer rules change, citation data lag or untimely.