Incident: Pudong Jinqiao revealed its 2021 earnings report. During the reporting period, the company achieved total operating income of about 4.62 billion yuan, an increase of 28.5% over the previous year; net profit attributable to shareholders of listed companies was about 1.62 billion yuan, an increase of 46.5% over the previous year.
Performance growth in the fourth quarter exceeded expectations, and Biyun Zundi Settlement contributed to profit growth. The fourth quarter of 2021 saw a sharp increase in revenue of 2.89 billion (YoY +143.8%) in a single quarter, and net profit attributable to the parent company was 1.02 billion (163.5%). The annual ROE level was 14.3%, an increase of 3.6 pct over the previous year.
Thanks to an increase in real estate sales and settlement, performance increased dramatically. The Biyun Zun Residence project has already passed completion and acceptance. At the end of December 2021, the first phase of the project began handing over houses one after another, superimposing existing housing sales from projects such as Office Park Gimhaiyuan and Yudu Shenjiangyuan to jointly drive growth in real estate sales revenue.
The second phase of Biyun Zunzun Residence was sold out, and the settlement of sales properties continued to boost future profits. In December 2021, Biyun Zun Residence Phase II was sold out, with a total value of 5.23 billion yuan. According to the sales of the first phase of the project in 2020, the latest delivery time is estimated to be in 2022, the second phase of the project will be sold in 2021, and delivery is expected in 2023. The total value of the Biyun Residence project, including VAT, is about 10.13 billion dollars.
The value of the first phase of the Biyun Zundi project excluding tax was about 4.64 billion yuan, while the company's fourth quarter revenue, including the leasing business, was 2.89 billion dollars, indicating that not all of the first phase of the project was delivered during the reporting period. In the third centralized land supply in 2021, the company added 3 new plots of land, with a total land acquisition price of 4.5 billion yuan, a total floor area of 636,000 square meters, an average floor price of 7074 yuan/㎡, and a consolidated sales price of 29,000 yuan/㎡, excluding commercial and leasing parts, with an estimated saleable value of 12.5 billion yuan. With the unsold projects of Biyun Zundi and subsequent new land acquisition projects progressing one after another, the company's performance can be expected to grow continuously.
The Golden Central Plan is progressing at an accelerated pace, and the renovation of the old factory helped the company reevaluate its properties. Under the impetus of the Golden Central Plan in Pudong, Shanghai, the company continued to push forward the renovation and expansion projects of its properties, driving a continuous increase in the value of owned properties. Among them, the draft SC Johnson plot plan was announced, and the total construction area of the plot was about 526,000 square meters. The Carrefour project has collected international proposals, and the total construction area of the plot is about 354,000 square meters. The draft plan for Jinqiao Unit B has been announced.
We believe that the growth of the company's real estate leasing business is mainly driven by the two dimensions of volume and price. In the current context where leasable properties are mainly early-built factories and storage properties, the accelerated implementation of regional planning will continue to increase the revaluation of the company's existing properties. On the one hand, under the new plan, after the renewal of old properties, the leasable floor area increased the driving force; on the other hand, industrial land supply attributes were changed to commercial land, driving the increase in rent unit prices.
Investment advice: Affected by Biyun Zundi's settlement profit exceeding expectations, we raised our earnings forecast for 2021 to 2023.
The company is expected to achieve operating income of 4.62 billion, 6.98 billion, 8.59 billion (previous value of 4.248 billion, 4.93 billion, 5.492 billion), up 28.5%, 51.2% and 23.1% year on year, and net profit attributable to the parent company of 1.62 billion, 2.66 billion and 3.52 billion (previous values were 1,294 million, 1,578 million and 1,948 million), up 46.5%, 63.8% and 32.3%. Corresponding PE was 9.0 times, 5.5 times and 4.1 times, maintaining “buying” ratings.
Risk warning: The tightening of the financing environment has exceeded expectations, the tightening of real estate regulation policies has exceeded expectations, the epidemic has repeatedly impacted the real estate leasing business again, and citations are lagging behind or not in a timely manner.
