2020 medium report shows that the company's revenue is 37.37 billion (- 3.5%), net profit is 6.06 billion (- 28.5%), net profit after deducting non-return is 5.93 billion (- 29.8%), net profit margin is 17.5% (- 4.6pct), net profit margin is 16.2% (- 5.7pct).

Event comment

The epidemic dragged down the delivery and settlement of real estate, and the production city business continued to make efforts. The epidemic dragged down the delivery and settlement of real estate projects. In the first half of the year, the settlement area of the company's development business was 171.9 million square meters (- 19.0%), the average settlement price was 9300 / level (- 13.9 percent), the development revenue decreased by 30.2 percent, and the gross profit margin decreased to 34.7 percent. With the strength of the industrial city business, the settlement revenue of the park increased by 45.7% (of which the industrial service income was + 11.2%), and finally the company's revenue decreased slightly by 3.5%. The increase in the revenue share of the production service business with high gross profit margin forms a certain support to the gross profit margin, but due to the substantial increase in the revenue share of other cities with lower gross profit margin, the company's comprehensive gross profit margin has also dropped by 3.5pct to 47.0%; the proportion of superimposed financial expenses and the profit and loss ratio of minority shareholders has increased, and the decline in the company's return net profit is greater than that of revenue. As of the middle of the year, the company received 125.55 billion of the accounts in advance, covering 2.1 times the annualized settlement income of the development business, and the company is expected to recover part of the completed settlement in the second half of the year after the epidemic has subsided; Chengcheng business is expected to continue to develop, and the company's annual performance is still guaranteed.

The decline in sales is obvious, and the performance of land acquisition is positive. Affected by the rhythm of land acquisition in previous years, the company's push plate supply was slightly insufficient this year, and the epidemic also had an impact on sales. In the first half of the year, the company's residential sales amount, sales area, and average sales price changed respectively-59.1%,-60.9%, and + 4.6% compared with the same period last year. As of the middle of the year, the company has a saleable area of 126.3 million square meters, which is slightly insufficient in the short term, or it may suppress the annual sales to a certain extent. In order to solve the problem of insufficient push volume, the company has been active since 2019, and continued the positive trend in the first half of 2020. In the first half of the year, the land price, land area and average land price were + 96.5%, + 91.7% and + 2.5% respectively compared with the same period last year, the land area / sales area was 218.9% (+ 174.2pct), the static land-to-sales ratio was 56.4% (- 1.1pct), and the undeveloped land storage was 12.739 million square meters in the middle of the year.

The contribution around Beijing has increased, new business has continued to advance, and financing capacity is still guaranteed. In the first half of the year, revenue around Beijing accounted for 62.4% (+ 23.9pct), production and service revenue accounted for 77.5% (+ 3.6pct), and sales around Beijing accounted for 65.0% (+ 6.8%). The new business continued to advance, and in the first half of the year, the company acquired four new commercial complex projects, won the bid for one project agent construction service, and locked in a pre-service provider for the urban renewal project, covering key cities such as Nanjing, Wuhan, Guangzhou and Harbin. The company clung to the money back, and the on-balance sheet return rate increased to 72.5% from the end of last year; the debt rose slightly, with interest-bearing liabilities of 203.6 billion in the middle of the year (+ 13.6% at the end of last year), net debt ratio of 193.1% (+ 8.2% at the end of last year), and financing costs slightly increased by 0.1pct to 7.96% over the end of last year; but considering the credit endorsement brought by Ping an entry, the company's financing ability is still guaranteed.

Investment suggestion: continue to make efforts in the production city business, and actively expand reserves to solve the pain point. The replication in different places is very effective, the production city business continues to make efforts, actively take the land to solve the pain points, and the new business advances steadily. It is estimated that the net profit of return to the mother in 2020-2022 is 186216,000,000 yuan, corresponding to 4.0X/3.5X/3.0X for PE, maintaining the "buy" rating.

Risk hint

1. Relatively insufficient marketable resources

two。 The timing of the realization of long-term potential is uncertain.