Overview of events
Greenland Holdings released its three-quarter report in 2020, with revenue of 321.11 billion yuan in the first three quarters, + 9.1% year-on-year, and net profit of 12.04 billion yuan, + 1.9% compared with the same period last year.
Steady growth in performance and slight decline in profitability
2020Q1-3 achieved operating income of 321.11 billion yuan, year-on-year + 9.1%, home net profit of 12.04 billion yuan, year-on-year + 1.9%, steady growth. The lower growth rate of net profit than the growth rate of revenue is mainly due to the net income of investment of 1.92 billion yuan, down 48.4% from the same period last year. The company's return on net assets, gross profit margin and net profit margin were 14.9%, 14.1% and 5.2% respectively, down 0.38pct, 0.24pct and 0.13pct from the same period last year, and profitability declined slightly.
The decline in the scale of sales has narrowed, and the attitude towards taking land tends to be positive.
2020Q1-3 achieved sales of 217.9 billion yuan, down 7.1% from the same period last year. Compared with the decline in 2020H1, 20.7pct is narrowed. As the company actively starts work and pushes goods, sales for the whole year are expected to recover steadily. In terms of land acquisition, the company added a total of 24.15 million square meters of construction capacity, and the corresponding amount of land was 81.7 billion yuan, accounting for 37.5% of the sales amount. Compared with the improvement of 10.4pct in 2019, the investment was significantly increased.
The level of leverage has increased slightly, and the pressure on short-term debt repayment has increased.
By the end of the reporting period, the company's asset-liability ratio and net debt ratio excluding accounts received in advance were 53.20% and 183.45% respectively, up 1.60pct and 10.40pct over the same period last year, and the leverage ratio rose slightly. In addition, the company has 80.57 billion yuan in money on hand, and the cash-to-debt ratio is 0.78. it is 0.14 lower than the same period last year, and the risk of short-term debt repayment has increased.
Investment suggestion
Greenland Holdings deepens the mixed reform of state-owned assets, steady increase in performance, better return, optimization of soil and storage structure, and diversified coordinated development. We keep our profit forecast unchanged. We expect the company's EPS for 20-22 years to be 1.46 million 1.75 Placement 1.99 yuan, corresponding to 4.3 Placement 3.6 Plus 3.1 times, and to maintain the company's "overweight" rating.
Risk hint
Sales fell short of expectations, profit margins declined, and provision for impairment of inventory affected performance.