Performance review
2021 performance is in line with our expectations
Lujiazui announced its full-year results for 2021: operating income fell 4 per cent year-on-year to 13.9 billion yuan, while net profit rose 7 per cent to 4.3 billion yuan, in line with KuaiBao's data. The company declares a dividend of 0.535 yuan per share (including tax) for the whole year, and the dividend payout rate is maintained at 50%.
The results recorded steady growth in 2021. In 2021, the company's income from real estate sales, real estate leasing, property management and financial industry was-23%, 10%, 12%, 17%, 49.7, 34.5, 18.7 / 2.94 billion yuan, respectively, resulting in a slight decline of 4% in total revenue. The after-tax gross profit margin for the whole year was 56%, which was basically the same as the same period last year. Non-operating income increased by 530 million yuan over the previous year to 610 million yuan (including 490 million yuan from compensation in the financial sector), while the proportion of minority shareholders' profit and loss in after-tax profit fell 6 percentage points to 14% year-on-year, and the final homed net profit increased by 7% year on year.
The holding business maintains the growth trend. ① office: office property rental income in 2021 increased by 6% to 3.2 billion yuan compared with the same period last year. At the end of the period, the rental rate of grade An office buildings / high-quality R & D buildings in Shanghai increased by 5 percentage points to 85% and 87%; ② business: commercial property rental income increased by 46% to 450 million yuan in 2021. ③ Hotel: hotel property revenue in 2021 increased by 45% to 110 million yuan compared with the same period last year, and the occupancy rate of Dongyi Hotel / Mingcheng Hotel / Tianjin Wanyi Hotel increased by 6-46-14% compared with the same period last year.
Trend of development
Lease income or pressure in 2022. Within the scope of the company's consolidated statement in 2021, the long-term operating property realized a rental cash inflow of 3.863 billion yuan (an increase of 8% over the same period last year). Considering that the company's holding properties are mainly concentrated in the Shanghai area, we expect that the recent epidemic in Shanghai may suppress the company's rental income. With reference to the company's rent reduction of 240 million yuan to tenants in 2020, the company has no plans to enter the market in 2022, and we expect the annual rental income to decline to about 3.6 billion yuan (down 6% from the same period last year).
Continue to promote the business development of the financial sector. In 2021, the company's financial revenue increased 17% year-on-year to 2.94 billion yuan, accounting for 21% of total revenue (17% in 2020). In 2022, the company plans to achieve a total inflow of 3.6 billion yuan and a total outflow of 9.4 billion yuan. We expect the company to continue to increase investment and support in financial business in the future, which is expected to become one of the stable sources of performance of the company in the future.
Profit forecast and valuation
Taking into account the impact of the epidemic on the company's leasing business, we lowered our 2022 profit forecast by 9% to 4.2 billion yuan, and introduced a new profit forecast of 4.3 billion yuan in 2023. The current A-share price corresponds to a price-to-earnings ratio of 11.3 times earnings in 2022 and 23. The current B-share price corresponds to a price-to-earnings ratio of 5.8 times the price-to-earnings ratio of 6.0 in 2022. A-shares maintain a neutral rating and a target price of 12.62 yuan, corresponding to 12.1 to 11.8 times 2022's 23-year price-to-earnings ratio, which has 7% upside compared to the current share price. B shares maintain a neutral rating and a target price of $0.88, corresponding to 5.6 times 2022 Universe's 23-year price-to-earnings ratio, which has 6% downside from the current share price.
Risk.
The duration of the epidemic exceeded expectations; the development of the financial business sector was lower than expected.