Core ideas:

Increased settlement scale and improved profitability, resulting in substantial growth in performance

For the whole of 17 years, the company achieved a total operating income of 15.46 billion yuan, an increase of 57.2% over the same period last year, and a net profit of 1.14 billion yuan, an increase of 89.9% over the same period last year. The sharp increase in the company's operating income is mainly due to a 49% increase in the real estate settlement area compared with the same period last year, and the increase in house prices in the past two years and the optimization of the settlement structure have raised the settlement gross profit margin to 27%. At the same time, the improvement of the efficiency of company management and control has reduced the dilution of expenses to profits during the period, and jointly promoted high performance growth.

Affected by the regulation and control of key cities, the high level of sales scale has dropped slightly.

In 17 years, the company achieved sales of 22.3 billion yuan, which decreased slightly by 1.3% compared with the same period last year due to the regulation and control of key cities, with a sales rebate of 20.2 billion yuan, a sales payback rate of 91%, and an average sales price of 17984 yuan per flat, which continued to rise sharply. We believe that there is room for local adjustment in the policy of key cities in the past 18 years, and the substantial increase in the area of resumption of work in the past 16 years has provided sufficient flexible support for the growth of sales scale.

The intensity of land investment is still high, and the cost of acquiring land for projects outside Beijing is relatively low.

In 17 years, the company added about 142.7 million square meters of full-caliber land capacity, and the land investment was 15.06 billion yuan, accounting for 67% of the total sales in 17 years. Among them, the profit margins of Beijing projects affected by price limits are compressed, and the average cost of other projects is relatively low, about 6828 yuan per square meter, accounting for 39% of the average sales price.

It is estimated that the EPS in 18 and 19 will be 0.42 yuan and 0.48 yuan respectively, maintaining the "buy" rating.

Over the past 14 years, the company has actively expanded the land reserves of the core cities in the Yangtze River Delta and the central and western regions, ensuring the contribution capacity of resource reserves and potential goods value. With the substantial increase in the settlement area and the improvement of the company's profitability, the future performance growth has support, and considering that the company has a large number of high-quality commercial real estate projects in Beijing, the company has a high margin of asset safety.

Risk hint

The company's sales performance is greatly affected by the regulation and control policies of key cities, the settlement progress of the company's real estate projects is not as expected, and there is uncertainty about the improvement of the company's profitability.