The net profit of 2020H1 returned to its mother is + 34% compared with the same period last year, showing the true character of the dark horse.
On August 27, the company disclosed its 2020 semi-annual report that 2020H1 realized revenue of 6 billion, + 243.5% compared with the same period last year, and realized net profit of 120 million, + 34.3% over the same period last year. In the first half of the year, the company's settlement scale increased significantly, and sales, land acquisition and financing expanded in an all-round way, showing the true nature of the dark horse. Maintain the profit forecast of EPS of 1.12,1.41,1.77 yuan from 2020 to 2020, and maintain the "buy" rating.
Sales elasticity has been steadily realized, ensuring that 2020H1's sales elasticity has been steadily realized on schedule during the year, and the increase in delivery has pushed up revenue by + 243.5% year-on-year to 6 billion. The settlement structure dragged down the comprehensive gross profit margin from-13.0pct to 25.9% year-on-year, while low equity ratio projects were carried forward, resulting in minority shareholders' profit and loss as a proportion of net profit from + 13.8pct to 69.4% year-on-year. Although the growth rate of return net profit is lower than that of revenue growth, it still achieved a high growth rate of 34.3% in the reporting period.
2020H1 has sold 10.1 billion of its outstanding balance sheet, covering 71.9% of the 2019 annual revenue.
The company said that "to ensure that the planned carry-over projects are delivered on time during the year", with high growth in superimposed sales and thickening of pre-income reserves, off-balance-sheet cooperation projects are gradually entering the harvest period, and the return net profit for the whole year is expected to continue to grow steadily.
Market-oriented management speeds up turnover, and sales land is greatly expanded.
The company defines the full-cycle operation system from land acquisition to project delivery, and the market-oriented management speeds up the turnover.
2020H1 realized contracted sales amount of 12.28 billion, year-on-year + 31.7%, equity sales amount of 8.82 billion, year-on-year + 54.2%; sales rebate 10.02 billion, year-on-year + 40.7%, equity rebate 7.29 billion, year-on-year + 51.4%. 2020H1 added total land storage price of 27.22 billion, year-on-year + 188.9%, total equity price of 10.14 billion, year-on-year + 81.0%, investment intensity of 222%, compared with 2019 + 121pct for the whole year.
The new projects are mainly located in the core first-and second-tier cities such as Beijing, Chongqing, Wuhan and Zhengzhou.
At the end of the reporting period, the area under construction and to be built is 1174.2 square meters (22.6% of the top three cities Chongqing, 12.5% of Beijing and 10.0% of Kunming), and annual sales are expected to have an impact on 350-40 billion.
The background of central enterprises gives leverage advantage, and financing makes efforts to accumulate growth.
2020H1's cash coverage ratio is 136.9%, with a net debt ratio of 238.9% compared with + 153.9pct at the end of 2019. At the end of July, the company's loan balance was 48.2 billion yuan, a sharp increase of 126% compared with the end of 2019.
On July 10, the company's board of directors examined and passed the "bill on increasing the financing quota for the year 2020", which is proposed to increase the financing quota by 33.6 billion yuan for the whole year. 2 billion ABS was approved on July 9, and 700 million yuan of corporate bonds were successfully issued on August 6 (with a five-year coupon as low as 3.8%). Since the beginning of this year, various financing channels have been opened, and the advantages of resource endowments and group support in the context of central enterprises continue to be realized.
Small body big dream, optimistic about the future into the hundreds of billions of echelons, to maintain the "buy" rating company as the only A-share real estate platform of China Communications Construction Group (unlisted), is expected to benefit from the group's industry-wide chain resources and financing support, and the group promised to gradually start the deep integration of other housing-related enterprises and China Communications Real Estate before the end of 2021. Li Yongqian, a former Greentown core executive, took office to accelerate market reform, and we are optimistic that the company will enter the hundreds of billions of echelons in the future. Maintain the profit forecast of EPS of 1.12,1.41,1.77 yuan from 2020 to 2022, with reference to the comparable company's average PE valuation of 6.8 times in 2020, taking into account the high growth expectations of sales and land acquisition, we think that the company will have a reasonable PE valuation of 9.5 times in 2020, with a target price of 10.64 yuan (the previous value is 10.64-11.20 yuan), and maintain the "buy" rating.
Risk tips: epidemic development uncertainty, industry policy risk, industry downside risk, business risk.
