This report is read as follows:
The on-balance sheet settlement margin hit bottom, but the return net profit fell slightly more than expected under industry pressure, but the long-term cautious style and good debt structure gave the company a basis to survive the cold winter, while management ability will be a plus in the future.
Summary:
The company's core homing net profit fell 45 per cent to 1.82 billion, falling at the central level of early performance forecasts, with a net profit of 730 million, down 80 per cent, slightly lower than expected. Although the company's gross profit margin remains stable, the profit carry-over of off-balance sheet projects is on the low side and the exchange loss exceeds expectations, resulting in a large decline in net profit. We have lowered the company's net profit from 2022 to 62.1 billion yuan in 2024 (the original price is 91.7 billion yuan), and the current price corresponding to PE is 2.7,2.6 and 2.4 times respectively. Although the current industry is under great pressure, the company has a good debt structure and is expected to become an excellent private enterprise through the cold winter of the industry and maintain its shareholding rating.
Revenue fell slightly, settlement gross margin hit bottom, maintaining stable delivery. The company's revenue fell 18.3% to 1.98 million square meters of delivery, basically the same as in the first half of 2022, and the delivery pace was in line with expectations, but the average delivery price fell to 20.9% to 12746 yuan per square meter. The company's gross profit margin is 20.7%, the same as in the first half of 2021 and slightly higher than for the whole of 2021. As the company has been more cautious, strong trading ability, profit margins are expected to basically hit bottom.
The debt structure is good and there is room to deal with the predicament of the industry. The company's current debt structure is relatively excellent, with 17% of maturing debt within one year, 4.7 years of debt maturity, no open market maturing debt during the year, and financing costs further reduced to 4.9% in the first half of the year. As the company is included in the list of model housing companies, it is expected to issue winning tickets with credit enhancement in September, which, if successful, will help restore market confidence in the company. In addition, the company has high-quality business in the core areas of Beijing and Shanghai, which will help the company to take the lead in the follow-up support measures of financial institutions.
Adjust the management structure and explore the second curve in adversity. In the first half of the year, sales fell 53.6 per cent to 63.1 billion, but the sales rebate reached 76 billion, with remarkable results. The company's structure is adjusted to real estate development, commercial, agent construction and functional platform, and the salary structure is adjusted, reflecting the company's positive attitude in response to the downward period of the industry. The company is actively transforming to light assets, and 29 new construction agents have been acquired in the first half of the year, with rapid progress. Trading ability and product advantages will contribute to the rapid expansion of agent construction business. In addition, Hongyu has launched a round of financing, with the help of rental housing support policy, is expected to maintain a high growth momentum.
Risk hint: the financing environment has not improved significantly.