The net profit of homing in the first three quarters of 2020 is expected to be + 75.1% compared with the same period last year. On October 14, the company disclosed the forecast of the results of the first three quarters of 2020. The company expects to achieve a net profit of 160 million yuan in the third quarter, + 128.9% compared with the same period last year. It is estimated that the net profit of homecoming in the first three quarters is 290 million yuan, + 75.1% compared with the same period last year. The performance growth mainly comes from the investment income contributed by the project company. We maintain EPS profit forecasts of 1.12,1.41,1.77 yuan from 2020 to 2022, and maintain the "buy" rating.
Performance growth continues to rise, and the project company's return-home net profit in the first three quarters is expected to achieve a year-on-year growth of 75.1%, up from 34.3% in the first half of the year. The substantial increase in the company's performance is due to the fact that due to the needs of business development, Kunming Zhongjiaojinsheng Real Estate has realized control and consolidation in this period. after the equity investment before the merger date is remeasured according to fair value, it is recognized that the investment income is about 290 million yuan. increase the return net profit by about 150 million yuan. The company's semi-annual report said that "to ensure the delivery of planned carry-over projects during the year", the high growth of superimposed sales increased the pre-income reserve, and the off-balance sheet cooperation projects gradually entered the harvest period, and the return net profit for the whole year is expected to continue to grow steadily.
Land acquisition continues to develop by leaps and bounds from January to August, and annual sales are expected to break through the 40 billion mark. 2020H1 has signed sales of 12.28 billion, year-on-year + 31.7%, and equity sales of 8.82 billion, + 54.2%. The total land storage price of 2020H1 increased by 27.22 billion, with an area of 1174.2 million square meters under construction and waiting for construction of 2020H1 compared with the same period last year (the top three major cities Chongqing, Beijing and Kunming 10.0%). According to Kerry statistics, from January to August, the company increased the full-caliber soil storage value of about 104 billion yuan, ranking 23rd in the country. The company has abundant sales value, and the annual sales are expected to break through the 40 billion mark.
Give full play to the advantages of financing and make full use of the final leverage expansion
The asset-liability ratio of 2020H1 deducting accounts received in advance is 86.3%, the net debt ratio is 238.9%, and the cash coverage ratio is 136.9%. At the end of September, the company's loan balance was 49.8 billion yuan, a sharp increase of 133% compared with the end of 2019. It was announced on July 10 that it plans to increase the financing quota by 33.6 billion yuan for the whole year, and 2 billion ABS has been approved since the second half of the year, successfully issuing 700 million yuan of corporate bonds (5-year, coupon as low as 3.8%), and planning to raise 4 billion yuan through the supply chain ABS. The company actively gives full play to the financing advantages given by the background of central enterprises and group support, and fully grasp the final leverage expansion before the full implementation of the new financing rules, so as to lay a resource foundation for further leapfrog development in the future.
Small stature and big dream, maintain "buy" rating
The company is the only A-share real estate platform of China Communications Construction Group, which is expected to benefit from the resources and financing support of the whole industry chain of the Group, and the Group is committed to gradually start the deep integration of other housing-related enterprises and Zhongjiao 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. To 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 6.9 times in 2020, taking into account the high growth expectations of sales and land acquisition, we believe that the company will have a reasonable PE valuation of 9.5 times in 2020, maintain the target price of 10.64 yuan, and maintain the "buy" rating.
Risk tips: epidemic development uncertainty, industry policy risk, industry downside risk, business risk.