The first phase of Biyunzun residence was delivered with high revenue and profit growth.
In the first half of 2022, the revenue and profit of Pudong Jinqiao achieved high growth on both sides, with operating income of 3.01 billion (YoY+155.5%) and net profit of 960 million (YoY+116.2%) belonging to the shareholders of the parent company. Gross profit margin on sales is 69.2% (YoY+9.1pct), net profit margin on sales is 31.2% (YoY-4.7pct).
The high growth of real estate development business pushed up the scale of income. In the first half of the year, the delivery of Biyun Zunju project drove real estate sales revenue to increase by 655.9% compared with the same period last year, realizing real estate sales revenue of 2.18 billion. However, under the impact of the epidemic in Shanghai, the real estate leasing business became a business, with an income of 760 million yuan (YoY-8.1%) in the first half of the year.
Under the impact of the epidemic, real estate leasing business is under pressure.
In terms of property leasing, affected by the recurrence of the COVID-19 epidemic in Shanghai in the first half of the year, Jinqiao in Pudong actively introduced rent relief measures for small and micro enterprises, resulting in a slight decline in rental income. The gross profit margin of real estate leasing business in the first half of the year was 49.4% (YoY-12.
9pct), contributing 380 million gross profit (YoY-27.3%).
The property held by the company is measured by the cost method. During the epidemic in Shanghai this year, the company waived the rent for qualified small and micro enterprises and individual industrial and commercial households for three months. At the same time, the depreciation cost still needs to be calculated continuously, resulting in a decline in the profit margin of the overall leasing business. With the continuous improvement of the epidemic situation in Shanghai, the rebound in rental rate continues to drive the recovery of leasing business.
The second phase of Biyunzun residence is sold out, and the potential settlement scale is huge.
In terms of real estate development business, 173 sets of Biyunzun Mansion Phase II, a key development project, with a construction area of 47,000 square meters, have been sold out by the middle of 2022, and the overall project has been completed.
Biyunzun residence, as a key residential project in the core area of Shanghai, has completed the pre-sale. Among the book contract liabilities, the advance collection of real estate sales is 4.88 billion, and the potential settlement income of the company with abundant outstanding resources has increased.
The financial structure has been continuously optimized, and financing costs have continued to decline.
As of mid-2022, the financial structure of Jinqiao in Pudong remained sound, with an asset-liability ratio of 53.7% (YoY-2.4pct) and a net debt ratio of 51.8% (YoY-9.7pct) excluding accounts received in advance, and the debt structure continued to be optimized. In the first half of the year, the company issued the first issue of 2022 with an ultra-short financing of 900 million yuan, with a coupon rate of 2.38%.
Compared with ordinary high-turnover real estate developers, the business model of Pudong Jinqiao rent-sale combination and piece-by-piece development has obvious competitive advantages in the current environment. In the process of gradually clearing out the risk housing enterprises, good debt structure, sound development model, constantly strengthen the company's financing position in the industry, the company maintains the main credit rating of AAA, and the continuous improvement of financing costs will promote the continuous repair of the company's operating quality.
Investment advice:
Since the first half of 2022, under the impact of the epidemic in Shanghai, the rental of properties held by Jinqiao in Pudong has been hit to a certain extent, but under pressure, the company has continued to promote the investment of new projects and the construction of stock projects in an orderly manner. in the current epidemic continues to improve, the company to take land, sales, leasing into the process of normal operation, the quality of operation is expected to continue to improve.
Affected by the epidemic, we estimate that from 2022 to 2024, the company will achieve operating income of 5.78 billion, 6.91 billion, 14.88 billion, an increase of 25.2%, 19.6% and 115.3% over the same period last year. Achieve net profit attributable to the parent company of 1.97 billion, 2.49 billion and 2.88 billion (the previous forecast for 22-23 is 2.66 billion and 3.52 billion), an increase of 21.6%, 26.1% and 15.8% year-on-year The current share price maintains a "buy" rating at 6.6x, 5.3x and 4.5x PE.
Risk hints: the financing environment tightened more than expected, real estate regulation and control policies tightened more than expected, the epidemic repeatedly hit the real estate leasing business again, and the citation data lagged or untimely.