Deep ploughing Fujian Province, backed by the world's top 500 enterprises
Jianfa property (2156.HK) is a holding subsidiary of Jianfa Real Estate Group Co., Ltd.
Jianfa Group was established with the establishment of Xiamen Special Economic Zone. After more than 40 years, Jianfa Group has developed into a large industrial investment enterprise group in Fujian Province with total assets of more than 650 billion yuan and annual operating income of more than 700 billion yuan. In 2021, it ranked 148th among the Fortune World 500s and 47th among the top 500th Chinese enterprises, ranking first among the top 100 enterprise groups in Fujian Province. From 2019 to 2021, the sales area of Jianfa Group is 658, 765, 1.181 million square meters respectively, the completed area is 361, 7.74 million square meters, and the area to be developed at the end of 2021 is 22.47 million square meters, which provides a solid guarantee for the acquisition of Jianfa property projects.
The reserve area has increased significantly, the co-management ratio is higher than the industry level, and the performance growth has a strong certainty. At the end of 2021, the company has a management area of about 33 million square meters, and the contract area is about 73.9 million square meters. the contract area / in-tube area ratio is 2.24 (the average value of typical property enterprises is 1.63), and more than 40 million square meters of reserve area will be delivered in the future. In 2021, the company received strong support from related parties, and there was a significant breakthrough in the new contract area. In that year, the new contract area was about 26.6 million square meters, of which the related parties obtained about 16.8 million square meters, double that of the previous year.
Management efficiency has been significantly improved and profitability has been improved.
Revenue in 2021 was 1.56 billion yuan, split by sector, property management services accounted for 48.7%, non-owner value-added services accounted for 34.9%. The structure of community value-added services has been optimized, forming six major business lines. In 2021, the sector achieved income of 250 million yuan, + 110.7% compared with the same period last year. The management efficiency of the company has improved significantly. From 2017 to 2021, the rate of management expenses has dropped from 17.46% to 13.67%, and the rate of sales expenses has remained stable at about 0.2% in the past two years. In 2021, the sales expense rate + management expense rate is close to 14%, and there is still room for further improvement compared with the industry. From 2017 to 2021, the company's overall gross profit margin was about 25%, and the operating profit margin increased slightly from 9.1% to 11.8%. The return net profit margin increased from 6.9% to 10.2%, a significant improvement.
Earnings forecast, valuation and rating: the target price is HK $4.85, with a "buy" rating for the first time. We predict that the company's operating income from 2022 to 2024 will be 2.21 billion yuan, 2.88 billion yuan and 3.54 billion yuan respectively, with revenue growth rates of 42%, 30% and 23%, respectively. The net profit of homing is 230 million yuan, 330 million yuan and 430 million yuan respectively, and the EPS of 2022-2024 is 0.17,0.25,0.32 yuan respectively. According to the absolute valuation method, we think the reasonable price of the company is about HK $5.33 per share. According to the relative valuation method, we believe that the reasonable price of the company is about HK $4.85 per share. Combining the absolute valuation and the relative valuation, we give the company a target price of HK $4.85 per share, corresponding to 24 times the projected PE for 2022. In view of the fact that the company relies on the strong state-owned enterprise group, the operation is sound, and the group support to the company is enhanced; the company has rich contract reserve area and strong certainty of performance growth, and is given a "buy" rating for the first time.
Risk tips: business development is not as expected risk, cost control risk, COVID-19 epidemic repeated risk, extension is not as expected risk.
