1H sales of more than 315.3 billion yuan, showing strong business ability and anti-risk ability.
1) as of June 22, the company had achieved contract sales of 42.51 billion yuan in June, down 15.4% from June 2019. 2) from January 1 to June 22, 2020, the company realized contract sales of 315.3 billion yuan, an increase of 11.9% over the first half of 2019. The company plans to open 20 new projects before the end of June, and it is expected that contract sales will further increase in the first half of the year. 3) from January 1 to June 22, 2020, the company's sales rebate reached 287.3 billion yuan, an increase of 53.3% over the first half of 2019. We believe that the company's contract sales rose against the market under the influence of the epidemic, reflecting the company's strong ability to resist risks and carry out marketing.
The sales target for 2020 is 650 billion yuan, which has been achieved by 48.5%. The company announced in the 2019 Annual report that the sales target for 2020 is 650 billion yuan, and 48.5% of the sales target has been achieved by June 22. We believe that the company will not worry about achieving its business target by 2020.
Year-to-date repurchase amounts to HK $3.203 billion, showing confidence in the future of the company. On June 6, 2019, the Company was granted a share buyback authority at a general meeting to repurchase up to 1312783490 shares and exercised this right for the first time on May 4, 2020. As of June 19, 2020, the company has repurchased a total of 188 million shares in this round of repurchase, with a total repurchase amount of HK $3.203 billion. Our average repurchase price is HK $17.03 per share.
Implement the equity incentive plan and bind the middle and high-level interests. Under the equity incentive scheme approved on June 6, 2019, the Company granted a total of 623 million new shares of US $0.01 each to the directors and employees of the Company on April 24, 2020 at an exercise price of HK $13.112 per share. In total, the company granted 049 million and 574 million share options to 5 directors and 198 employees respectively.
Profit forecast: we expect the company's total revenue from 2020 to 2022 to be about 553.4 billion yuan, 625.4 billion yuan and 695.3 billion yuan respectively. We estimate that the gross profit margin from 2020 to 2022 will be 30.005%, 29.00% and 29.00% respectively, and the net profit will be 27.9 billion yuan, 32.1 billion yuan and 36.1 billion yuan respectively.
Investment advice: give a rating of "better than the market". We estimate that the EPS in 2020 and 2021 will be 2.13 yuan and 2.45 yuan respectively. As of June 24, 2020, the company closed at HK $19.50 (RMB17.77), corresponding to a PE of 8.35x in 2020, 7.27x in 2021, and a 20-year PEG of 0.23x. We value the company's 2020 target at 9-10XPE, with a reasonable value range of HK $21.02-23.35 (RMB19.16-21.29) and a "better than the market" rating.
Risk hint: the company faces the downside risk of the real estate industry fundamentals; the company's third and fourth line project sales are not as expected; the settlement is not as expected. Full text 1 HKD = 0.9115 RMB.