Events. The company publishes its semi-annual report for 2021. During the reporting period, the company achieved operating income of 38.48 billion yuan, an increase of 29.6% over the same period last year, and the net profit belonging to shareholders of listed companies was 1.75 billion yuan, down 14.7% from the same period last year.
In the first half of 2021, the company's revenue increased by 29.6%. Due to the lack of settlement of non-consolidated projects, the investment income also decreased, and the company's parent net profit fell by 14.7%.
At the end of June 2021, after deducting restricted funds, the company's cash-to-debt ratio was 1.03 times. The net debt ratio is 95.27%, down 2.00 percentage points from the end of 2020. The debt ratio of the company's total liabilities and total assets after deducting accounts received in advance is 77.42%, down 1.27 percentage points from the end of 2020.
According to the company's semi-annual report of 2021, the real estate business: (1) the contract sales of the company's real estate business reached 108.98 billion yuan in the first half of 2021, an increase of 33.9% over the same period last year, and the sales area was 7.901 million square meters, an increase of 29.7% over the same period last year The average sales price is 13793 yuan per square meter, an increase of 3.2% over the same period last year (2) the company added 41 new projects in the first half of 2021, with a total planned construction area of 6.999 million square meters, an increase of 1.7% over the same period last year. The average land price of new projects is about 4100 yuan per square meter, down about 7.1% from the same period last year. (3) in the first half of 2021, the company completed a new construction area of 5.41 million square meters, down 5.9% from the same period last year; the completed area was about 3.95 million square meters, down 25.0% from the same period last year. (4) by the end of June 2021, the company has developed 505 projects, of which the total planned construction area of projects under construction is about 31.93 million square meters, the total planned construction area of unstarted projects is about 15.47 million square meters, and the total area of completed resources is 47.4 million square meters, an increase of 7.5 percent over the same period last year. The contract liabilities that have been sold and unsettled within the scope of the company's consolidated statements at the end of the reporting period are 128.82 billion yuan, which is 4.7 times of the semi-settlement income of the previous year.
Construction business: the total contract value of the new project undertaken by the company in the first half of 2021 is 15.31 billion yuan, an increase of 3.3% over the same period last year. Among them, 17 projects worth more than 300 million yuan, accounting for 53% of the new contract value. The operating income in the first half of 2021 was 11.35 billion yuan, an increase of 17.2% over the same period last year. Affected by the rise in raw material prices, the comprehensive gross profit margin in the first half of the year was 8.28%, down 2.82 percentage points from the same period last year.
Investment advice. Real estate and construction two-wheel drive, sales maintain rapid growth, maintain a "better than the market" rating. The company's core business is real estate development and construction. The company's real estate business focuses on mainstream housing. In the first half of 2021, the company's real estate business realized contract sales of 108.98 billion yuan, an increase of 33.9% over the same period last year. We estimate that the EPS of the company in 2021-2022 is 1.85 yuan and 2.17 yuan. Considering the high growth of the company's performance, the company is given a dynamic PE of 3-3.5 times in 2021, and the corresponding reasonable value range is 5.55-6.48 yuan, maintaining the company's "better than the market" rating.
Risk Tip: the company faces the risk of policy regulation and sales falling short of expectations.