Settlement performance declined compared with the same period last year, operating cash flow was positive
Xuhui Holdings released its half-yearly 2022 report that the company's operating income in the first half of the year was 29.72 billion yuan, down 18.3% from the same period last year; its net profit was 731 million yuan, down 79.7% from the same period last year; the overall settlement gross profit margin was 20.7%, unchanged from the same period last year; and the core net profit margin was 6.1%, down 3.1% from the same period last year. The company's settlement performance declined in the first half of the year, and its profitability was under pressure. we lowered our profit forecast and adjusted the company's estimated 2022-2024 net profit from 76.3,83.1,100.5 to 46.9,56.9 and 6.07 billion yuan, corresponding to EPS of 0.5,0.6,0.7 Hong Kong dollars, and the current share price corresponding to PE is 3.4,2.8,2.6 times. Considering the high quality of the company's soil storage structure, the financing channels are smooth. Has the long-term healthy development potential, maintains the "buy" rating.
The sales performance is lower than expected, and the investment is prudent and the land reserves are abundant.
Xuhui's contract sales in the first half of the year totaled 63.14 billion yuan, down 53.6% from the same period last year; the contract sales area was 414.5 million square meters, down 48.0% from the same period last year; among them, 34.7% in the Yangtze River Delta, 23.8% in the Bohai Rim, 30.5% in the central and western regions and 11.0% in South China, 86.4% in first-and second-tier cities, and 90.0% in residential projects. The company invested cautiously in the first half of the year, focused on high-quality land in the core cities, and acquired six new projects, with a total construction area of 617,000 square meters, rights and interests construction area of 374,000 square meters, and an equity ratio of 60.6%. By the end of June, the total construction area of the company's land reserve is about 4930 million square meters, the rights and interests construction area is about 2630 million square meters, and the equity ratio is 53.3%. The land reserve is relatively sufficient, which can cover 3-4 times the sales area in 2021.
Concentric circle strategy continues to advance, diversified business is growing rapidly.
Xuhui Commercial realized property income of 660 million yuan in the first half of the year, an increase of 69% over the same period last year. There were 14 opening projects with a total construction area of 960,000 square meters. Xuhui Yongsheng service realized operating income of 3.16 billion yuan, an increase of 53.6% over the same period last year, and its net profit was 380 million yuan, an increase of 33.4% over the same period last year. Contract and managed floor space increased by 33% and 66% respectively. Xuhui has a total of 35 projects under management and a total area of more than 7 million square meters, achieving a breakthrough in five major business models. Xu Huiyu has a layout of 21 cities, is the industry with the largest community and the largest number of leasing enterprises, and recently launched a round of financing work, has contacted a number of well-known international investment institutions.
The three red lines remain green and the financing channels are unobstructed.
As of the three red lines of 2022H1, the average financing cost has fallen to 4.9%. In June, the company successfully issued 500 million corporate bonds as a private model housing enterprise, and is preparing medium-term notes fully guaranteed by the China Bond Credit Promotion Investment Company. At the same time, the company's rigid maturing bonds have been cleared in the second half of the year, and the debt repayment pressure is relatively small.
Risk hint: sales growth is lower than expected, industry regulation is higher than expected, and diversified business development is less than expected.