Event
The company released its semi-annual report of 2022, with operating income of 520 million yuan in the first half of 2022, an increase of 27.0% over the same period last year, and a net profit of 63.27 million yuan, a decrease of 5.1% over the same period last year.
Brief comment
Acquisitions bring rapid growth in revenue. Benefiting from the gradual consolidation of five acquisitions completed in 2021, the company's operating income grew rapidly in the first half of the year, with a growth rate of 27.0%, an increase of 17.3 percentage points over the same period last year. Of this total, rental income was 390 million yuan, an increase of 31.1% over the same period last year, which was the main contribution business sector; property services and other income was 130 million yuan, up 16.0% from the same period last year. The main reasons why the growth rate of net profit from homing is lower than the growth rate of income is as follows: 1. The gross profit margin is 39.0%, which is 3.4 percentage points lower than that of the same period last year; 2. Due to the impact of the epidemic, the construction under construction is delayed and the progress of attracting investment is slower than expected. it means that the corresponding income has not been realized while the financial expenses have increased under the influence of the new leasing standards.
The growth rate of financial expenses in the first half of the year was 40.8%, which was higher than the growth rate of income. 3. The investment income decreased by about 15.02 million yuan compared with the same period last year. Excluding the impact of rental standards, the company's EBITDA is 420 million yuan, an increase of 28.7% over the same period last year, achieving rapid growth. In addition, the operating cash flow, which reflects the real operating situation of the company, has also increased significantly, with net cash flow generated by operating activities rising by 162% in the first half of 2022 compared with the same period last year.
Xintuo Shanghai has two light asset management projects. Last year, the company began to expand its light asset management program to reduce the adverse impact of the new leasing standards. In the first half of the year, two light asset management projects were obtained, including: 1) the property management business of tomorrow Plaza, which is located in Shanghai, involving commerce, office and hotel, with a volume of about 128,000 square meters, which marks the company's breakthrough in the external development of Class A complex property management business; 2) the entrusted management business of Renda Commercial Building under Shanghai Jiushi Tourism Group, the project is located in Shanghai, with a volume of about 8000 square meters. By the first half of 2022, the company had 72 operating projects, an increase of 2 compared with the end of 2021, including 62 in Shanghai, 7 in Beijing, 2 in Hangzhou and 1 in Nanjing, with excellent regional layout; the total operating area was about 1.12 million square meters, of which the leased operating area and shareholding operating area were 720000 square meters and 120,000 square meters respectively, and the entrusted operating area was 420,000 square meters, an increase of 140000 square meters over the beginning of the year.
Tenants are becoming more diversified. Up to now, with its competitiveness of the whole value chain in positioning, transformation, investment promotion and operation, as well as the unique location advantages of the project, the company has successfully attracted a number of excellent new economy enterprises to enter the park. The current tenant structure includes not only traditional industries such as manufacturing, professional services and trade services, but also new economic forms such as culture, creativity and knowledge economy, as well as hot fields such as TMT and biomedical industries. The diversification of tenants will help the company to spread its risks and improve its overall business performance.
Lower the target price and keep the buy rating unchanged. We maintain the company's profit forecast that the EPS for 2022-2024 will be 0.29Unix 0.36Unix 0.43 respectively. The average PE valuation of the comparable company in 2022 is 26x. We give the company a valuation of 26x in 2022, corresponding to the target price of 7.54 yuan (the original target price is 12.90 yuan) and keep the buy rating unchanged.
Risk hint: repeatedly adversely affected by the epidemic; the expansion of new projects may be lower than expected.