Event description
In the first three quarters, the company achieved revenue of 56.73 billion (- 11.8%), net profit of 7.28 billion (- 25.3%), net profit of 7.1 billion (- 26.8%), net profit margin of 14.2% (- 1.2pct) and net profit margin of 12.8% (- 2.3pct).
Event comment
The park business increased hedging development and settlement declined, and the company's profit margin improved in the third quarter. The decline in the development settlement area dragged down the company's revenue, with a settlement area of 290.3 million square meters (- 32.8%) in the first three quarters and 1.185 million square meters (- 38.7%) in the third quarter alone. The settlement income of the industrial park increased significantly, and the settlement income of the industrial park increased by 37.1% to 26.11 billion yuan in the first three quarters, hedging against the downward trend of development revenue. The revenue share of the high gross margin park business (especially industrial development services) increased, driving the consolidated gross profit margin to increase by 2.0pct to 42.4% in the first three quarters, but the decline in performance in the first three quarters was greater than that in revenue due to the increase in the profit and loss ratio of financial rates and minority shareholders. It should be noted that as the impact of the epidemic gradually faded, the company's performance in the third quarter was significantly optimized, with year-on-year changes in net profit and return net profit of + 14.0% and-3.8% respectively (Q2 of-37.3% and-42.4%). Looking back, the company currently receives more than 120 billion yuan in advance, and the volume of development and settlement is still guaranteed; the continued strength of the industrial city business is expected to form a better supplement to the performance.
The development contract has dropped obviously, the overall performance of land acquisition is positive, and attention is paid to business investment. Affected by the rhythm of land acquisition in previous years, this year's development supply is slightly insufficient, with the contracted sales amount and sales area falling by 60.6% and 63.9% respectively in the first three quarters. Sales around Beijing have improved. The company's sales area around Beijing in the first three quarters increased by 4.2pct to 41.9% compared with the same period last year, and the proportion of sales in the third quarter alone increased by 11.7pct to 51.8%. Actively solve the pain point of insufficient value of goods, the overall performance of the company is positive, the land acquisition area / sales area in the first three quarters is 166.7% (218.9% in the first half of the year); the intensity of land acquisition in a single quarter slowed down, Q3 land area / sales area is 67.8%, or related to financing tightening. The company increased investment in commercial real estate, and the cash flow dimension of commercial real estate and related business land acquisition expenditure accounted for 51.4% of the total land acquisition expenditure, contributing to the rapid development of new business.
The cash flow of Sancheng has improved significantly, and leverage has declined slightly. The cash flow of the production city improved significantly, and the net operating cash flow of the production city branch decreased by 25.3 billion yuan in the first three quarters. Despite the increase in land replenishment and the large investment in the early stage of the new business, the company's leverage has declined slightly due to the tight grasp of cash recovery and cash flow optimization in the city. At the end of the third quarter, the net debt ratio was 190.4 per cent (mid-year-2.7pct), excluding pre-received asset-liability ratio of 76.5 per cent (mid-year-1.0pct), and cash-to-short debt ratio of 0.4. Objectively speaking, the company's current leverage pressure is at a high level in its peers, but considering the optimization of cash flow, Ping an's credit endorsement and the potential land storage value brought by the unique business model, the company's financial pressure can be controlled as a whole.
Investment suggestion: the high settlement of the park supports the profit, and the cash flow of the production city is improved. The industrial city business continues to hedge against the decline in development and settlement; actively take the land to solve the pain point, and the new business advances steadily; the cash flow of the production city has improved significantly, helping the company to leverage control. It is estimated that the net profit from 2020 to 2022 will be RMB 1,760.98 billion, an increase of 4.9%, 14.5%, 12.8% respectively over the same period last year, corresponding to the 3.6X/3.1X/2.8X of PE, which is rated as "overweight".
Risk hint
1. Relatively insufficient marketable resources
two。 The timing of the realization of long-term potential is uncertain.