1H22: strive to achieve cash flow; maintain "buy"
The company released its results on August 30: 1H22 revenue was + 52% to 29.7 billion yuan, core net profit was-3% to 1.8 billion yuan, and gross profit margin was 20.7%, unchanged from the same period last year. Considering the impact of the decline of the real estate industry and epidemic prevention and control on the company's operations, we downgrade the company's revenue and gross profit margin assumptions, and adjust the company's 22-24EEPS to 0.59 soybean 0.53 pound 0.55 yuan (previous value: 0.87 pound 0.92 pound 1.01 yuan). Taking into account the company's sound financial performance and medium-and long-term diversification, we believe that the company is reasonable to have a 2022e PE of 4.7 times and adjust its target price to HK $3.15 (previous value: HK $6.96, based on a 2022e PE multiple of 6.5x) to maintain a "buy" rating.
The decline in prosperity has led to a decline in sales. Land prudently ensures that cash flow 1H22 achieves sales of 63.1 billion yuan,-54% compared with the same period last year, mainly due to the decline in the removal rate caused by the market boom. In the second half of the year, the company plans to push more than 200 billion goods, of which first-and second-tier cities account for 85%, which is expected to help sales pick up. However, we need to pay attention to the follow-up inventory situation of the company. 1H22 Company is more cautious in taking land, replenishing the land storage area of 3739,000 square meters,-92% of the same period last year, 3.435 billion yuan of land of rights and interests,-87% of the same period last year, and the intensity of land acquisition is 10%, year-on-year-30pct. The weakening of land acquisition will affect the elasticity of subsequent sales. The company's 1H22 contract debt scale is 82.9 billion yuan, and the carry-over resources are relatively abundant.
The financial situation is still sound, pay attention to the follow-up financing situation.
At the end of 1H22, the company's "three red lines" index was firmly in the green category, with a net debt ratio of 78.5%, an increase in 15.7pct compared with the beginning of the year, a deduction of 67.7% of the pre-asset-liability ratio, and a cash-to-short debt ratio of 1.62 times. The company's interest-bearing liabilities totaled 114.1 billion yuan, with short-term debt accounting for only 17%. In the first half of the year, the company successfully issued US $150 million of green bonds and HK $2.545 billion of overseas convertible bonds, and issued 1 billion yuan of medium-term notes and 500 million corporate bonds in China.
Weighted average financing cost of the company compared with the same period last year-0.2pct to 4.9%. The company has no rigid payment of open market bonds before the end of 22, short-term debt repayment pressure. The company is promoting liquidity support such as the issuance of medium votes and liquidity support for state-owned banks. On August 31, the company announced a rights issue of 305 million shares at HK $2.06 per share, with an estimated net rights issue of about HK $630 million.
Concentric strategic layout, diversified business light departure
The company insists on development, commerce, agent construction, long lease, property multi-track, priority and priority. 1H22, the company's operating business revenue from + 52% to 3.4 billion yuan, of which 1) business: revenue from the same period last year + 69% to 660 million yuan, a total reserve of 30 shopping malls, has opened 14, the overall occupancy rate of 92% 2) Agent construction: as of 1H22, there are 35 projects under management (of which 29 are newly acquired by 1H22), with an area of 7.13 million square meters, and commercial agent construction projects account for 54%. The future agent construction business will be promoted to state-owned enterprises / city investment land agent construction, AMC poor agent construction and other business; 3) long rent: 82000 rooms have been developed, with a total opening of 32,000, with an average occupancy rate of 96% in the stable period. 4) property management: revenue from + 54% to 3.2 billion yuan, contract / area under management from + 33% to 290 million / 210 million square meters.
Risk tips: 1) the epidemic affects the development of business, especially operating real estate business; 2) profitability and sales growth are lower than expected.