Deep ploughing the Great Bay area, national expansion, multi-dimensional development, star team, great-leap-forward growth
The China Olympic Park was established in Guangzhou in 1996 and listed on Hong Kong shares in 2007. After 25 years of development, the company has moved from the Pearl River Delta to the whole country, and its sales scale has exceeded 100 billion in 19 years, which is one of the fastest growing among the hundreds of billions of real estate enterprises, and has formed a diversified business structure with real estate development as the core and commercial real estate as the auxiliary industry. The company actively introduces the star management team to optimize the level of management. In recent years, we have increased incentives, accounting for 0.36%, 0.37% and 0.93% of equity incentives in 14, 16 and 18 years, respectively, and it is planned that equity incentives account for up to 10% of the total equity in the next decade, which has been granted to 0.93%. The ownership structure is stable, and the Guo family holds a total of 55%; the dividend is active, with an average dividend rate of 38% in 2009-19; and the dividend is high, with a 20e dividend yield of 8.4%. In addition, the company property management subsidiary Aoyuan Health spin-off listing thickens the valuation of the company.
Sales reached hundreds of billions of steps, achieved great-leap-forward growth, and the strategy gradually shifted to regional deep ploughing.
The company began to accelerate its expansion in 15 years, and its sales CAGR reached 66% in 16-19 years, which is better than TOP30 sales CAGR43%, sales growth rate. In 19 years, the company's sales reached 118.1 billion yuan, + 29% compared with the same period last year, ranking 27th in the industry, up 6 places over the previous year. At the end of 1919, the total layout of 93 cities was completed, and the national layout was initially completed. in 19 years, the sales of South China, the central and western regions, East China and the Bohai Sea accounted for 36%, 26%, 23%, 11% and 4%, respectively. In 1919, the single city sales amount was 1.3 billion yuan, which is the lowest level of mainstream housing enterprises, and there is still much room for improvement in the future. In 16-19, the carry-over amount of CAGR reached 62%, and the return net profit CAGR reached 68%, which is in the leading level in the industry. On the occasion of the scale of hundreds of billions of dollars, the company's development strategy will gradually change from urban expansion to regional ploughing, promote single-city sales, and enter a new stage of development.
Active acquisition of land, national expansion, diversified channels, good quality and quantity of soil storage, and heavy storage in Dawan area.
The company is active in acquiring land, with a land acquisition / sales area ratio of 287%, 142% and 138% respectively in 17-19, which is significantly higher than that of its peers. And land acquisition has distinct characteristics: 1) Land acquisition channels are diversified, with 79%, 19% and 2% of land acquisition, 19% and 2% respectively. 2) acquisition and acquisition is dominant, which is conducive to cost control. The face price / average sales price ratio of land storage property is only 25%. 3) small-scale land acquisition, with an average area of 22, 20 and 190000 square meters in 17-19, and the opening time from land acquisition to opening was 8.8,8.2,7.5 months. The opening ratio of land acquisition in that year was 47%, 52% and 55%, and the turnover efficiency continued to improve. 4) the advantage of old land acquisition was highlighted, and the potential value of old land change exceeded 226 billion yuan, of which the Dawan area accounted for 89%. The company's soil storage quality is sufficient, at the end of 1919, the soil storage exceeded 4503 million square meters (equity ratio 79%) / 5348 million square meters (including the old reform), the goods value was 455 billion yuan / 681 billion yuan (including the old reform), covering 19 years sales reached 3.9times / 5.8times (including the old reform).
Financial health, ROE higher year by year, excellent performance, abundant advance income to help stable performance
At the end of 1919, the company's net debt ratio was 75%, and the cash-to-short debt ratio was 1.6 times, which was in the middle of the industry. The 20Q1 long-to-short debt ratio was 1.6 times, and the financing cost was 7.5%. The credit rating was upgraded in 19 years, and the new financing cost has declined in 20 years. The company's gross profit margin remained stable at around 30 per cent, turnover improved and the equity multiplier rose to 14.6, pushing ROE up to 31 per cent, an excellent performance. At the end of 1919, the advance payment was 86.1 billion yuan, + 44% compared with the same period last year, which could cover 170% of 19-year revenue, contributing to the stable release of follow-up performance. In addition, we estimate that the company's NAV is about HK $58 billion, with a NAV of HK $23.50 per share, and the current price is 55% lower than the discount.
Investment advice: diversified land acquisition, multi-dimensional development, great-leap-forward growth, covering and giving "strong push" for the first time.
After 25 years of development, the Chinese Olympic Garden has achieved a leap from regional housing enterprises in the Pearl River Delta to nationalized housing enterprises. The company has outstanding diversified land acquisition capacity, sufficient soil storage quality and low cost, leading the industry in sales growth in recent years, promoting the follow-up performance to continue to increase. We forecast earnings per share of 2.34,2.81 and 3.31 yuan per share in 2020-22, respectively, and give the target price of HK $13.0, equivalent to 20PE5.1 times, at a discount of 45 per cent of NAV, covering for the first time and giving a "strong push" rating.
Risk hint: the impact of COVID-19 's epidemic situation exceeded expectations, and real estate regulation and control policies tightened more than expected.