Main points of investment
Our point of view: the company is currently in the process of actively adjusting its structure, on the one hand, adjusting the soil and storage structure, completing seven regional restructuring, increasing the land share of second-tier and strong third-tier cities, and improving the overall urban energy level; on the other hand, it is to adjust the financial structure, broaden financing channels, reduce the ratio of non-standard financing and short-term liabilities, and ensure leverage rationality and financial security. For the first time since the company went public, the dividend payout rate is 40% of the core net profit, the dividend yield is 8.7%, and the current share price is 4.2 times PE in 2019.
The company's core net profit increased by 102% over the same period last year, and the performance was in line with expectations: in 2019, the company achieved operating income of 56.6 billion yuan (the same below), an increase of 88% over the same period last year; the core net profit was 3.9 billion yuan, an increase of 102% over the same period last year. The gross profit margin was 23.3%, an increase of 0.4 percentage points over the same period last year; the core net profit margin was 6.9%, an increase of 0.5 percentage points over the same period last year. The company paid dividends for the first time after listing, paying a dividend of 48.1 cents per share for the whole year, accounting for 40% of the core net profit.
Focus on supply in the second and third quarter: the company's sales target for 2020 is 168 billion yuan, an increase of 10% over the same period last year. The available value of goods for the whole year of 2020 was 260 billion yuan, with less push in the first quarter, accounting for 13% of the supply, and 28%, 40% and 19% in the second, third and fourth quarters, respectively.
Improve the proportion of land acquisition in second-tier cities: the company added 139 new land projects in 2019, with a total GFA of 1660 million square meters and a total land price of 76.4 billion yuan, of which second-tier cities accounted for about half of the total land acquisition cost of 4600 yuan per square meter. By the end of 2019, the company's total equity land storage area was 4565 square meters, an increase of 25% over the same period last year.
Broaden financing channels: as of the end of 2019, the company's net debt ratio was 65.6%, an increase of 7.5 percentage points over the same period last year. The average financing cost was 9.4%, down 50bps from the same period last year. At the end of the year, the company's paper cash was 26.5 billion yuan, and the total interest-bearing liability was 40.2 billion yuan, of which 53% was short-term debt. During the period, the company successfully issued US $500 million of 11.5% priority bills due in 2021, expanding overseas financing channels.
Risk hints: macroeconomic growth slows, industry restrictions tighten, liquidity tightens, commercial housing sales fall short of expectations, and RMB depreciates.