Event: on April 30, 2022, the company released the 2021 annual report. In 2021, the company realized revenue of 112.31 billion yuan + 28.1% and net profit of 3.6 billion yuan-48.8%.
Comments: settlement scale continues to improve, profitability is under short-term pressure; land investment strictly adheres to the safety line, diversified land acquisition focuses on core cities; continuous optimization of financial structure
1) in 21 years, the company achieved revenue of 112.31 billion yuan, an increase of 28.1% compared with 87.7 billion yuan in 20 years, of which the settlement area of the real estate development sector was about 1201.0 square meters, an increase of 18.3% over the same period last year. The net profit for the current period was about 6.69 billion yuan, down 31.1% from the same period last year, and the net profit from returning home was about 3.6 billion yuan, down 48.8% from the same period last year.
The decline in profits is mainly due to the increase in land acquisition costs, the 21-year settlement gross profit margin dropped from 23.2% in 20 years to 17.2%, a drop in 5.9pct compared with the same period last year, resulting in a decrease of 970 million yuan in gross profit; second, due to the influence of real estate regulation and cash flow, the company carefully calculated 2.16 billion yuan of impairment provisions such as inventory, an increase of 427% over the same period last year. Third, the investment income of joint venture development projects decreased by 510 million yuan over the past 20 years, down 39.1% from the same period last year.
2) in 21 years, the company achieved sales of 184 billion yuan, down 17.6% from the same period last year; recorded a sales rebate of 185.3 billion yuan, with a payback rate of 101%, a record high; and achieved a sales area of 1966 million square meters, down 12.2% from the same period last year.
The company actively responds to the change of centralized land supply policy and adheres to the diversified land acquisition model. In the past 21 years, the company has accumulated 47 new land reserves, and the contracted amount of land purchase is 37.6 billion yuan, down 57.8% from the same period last year; the corresponding volume construction area is 9.76 million square meters, down 58.7% from the same period last year; the unit price of the floor is 3852 yuan per square meter, up 2.1% from the same period last year; the company's investment-to-sales ratio is controlled below 40% and actively replenishes on the premise of ensuring the safety of cash flow. Among them, the land capacity construction area obtained by the company through "real estate + commerce", "real estate + industry", collection and mergers and acquisitions is 5.49 million square meters, accounting for 56%, and the new first-tier and second-and third-tier cities account for about 87%.
3) by the end of 21, the company's interest-bearing liabilities were 80.61 billion yuan, down 17 billion yuan from the same period last year, and nearly 30 billion yuan lower than the peak pressure at the end of June 20. At the same time, the company further optimized the debt structure, accounting for 52.0% of the bank financing balance at the end of the period, and the financing balance of non-bank financial institutions dropped to 19.71 billion yuan, effectively improving the degree of capital guarantee. The company's net debt ratio was 69.5%, down 5.6 pct from the same period last year; deducting the prognostic asset-liability ratio was 69.2%, down 0.7 pct from the same period last year; and the cash short-term debt coverage ratio was 0.88X, down 0.41X from the same period last year, with the "three red lines" in the yellow position. In 21 years, the company achieved 10 times of debt financing in the open market at home and abroad, with a financing scale of about 11.8 billion yuan, ranking among the domestic A-share housing enterprises. In M2, the company successfully issued four-year 1.5 billion yuan of corporate bonds with a coupon rate of 8%. To provide liquidity support for the company's sustainable development.
Profit forecast, valuation and rating: due to the impact of the company's lower-than-expected performance and the continued decline in industry profit space, the forecast return net profit for 22-23 is reduced to 39.0 yuan and 4.25 billion yuan (down 53.8% and 54.4% respectively), and the 24-year forecast net profit is 4.62 billion yuan. The current price corresponds to the 22-24 PE core valuation of 6.0X, 5.5X and 5.0X, respectively. The impairment of the company's assets is more adequate, the financial structure has improved significantly, and the potential for medium-and long-term development can still be expected, but due to the obvious pressure on short-term profits, the rating is downgraded to "overweight".
Risk tips: push sales are not as expected; financial improvement is not as expected; performance commitments are not as good as expected.