Core ideas:

In 2021, Zhongjiao Real Estate actively promoted the marketing activities to promote the steady growth of the company's sales, which correspondingly brought about the rapid growth of contract liabilities and laid the foundation for future performance growth. The short-term debt repayment pressure of the company increases, but as a central enterprise, the potential debt repayment ability is strong, even if the leverage is reduced in the future, abundant goods value can also ensure the company to achieve sustainable development.

First, the sales amount has achieved steady growth, and profit margins are expected to pick up in 2021. China Communications Real Estate has achieved full-caliber sales of 56 billion yuan, an increase of 5.1 percent over the same period last year, and a rebate of 59.1 billion yuan, an increase of 56.4 percent over the same period last year. We think that to show the high profitability of the company, we should start from two aspects: one is the horizontal comparison between enterprises, the profitability of the enterprises that can maintain stability or the relatively high position of the industry is still strong; the other is the vertical comparison on the timeline. When the current land cost is low, it can bring higher profits to the company in the future. Another indicator that affects the company's profit margin is the expense rate, which is reflected by the increase in interest payments and sales expenses.

Second, the value of goods is abundant, and the investment is focused on deep ploughing cities.

In the middle of 2021, 24 new projects were obtained by means of over-collection, mergers and acquisitions, capital increase, recruitment and auction, with a new land reserve of more than 3.7 million square meters and a surplus of 1787.7 million square meters of developable land, fully meeting the needs of the company's future development. it makes up for the defect that the company can no longer achieve the rapid growth of interest-bearing liabilities due to the high debt repayment pressure limited by the three red lines, even if Zhongjiao reduces investment and shifts the focus of work to lower liabilities. The value of its goods can also meet the steady improvement of the company's sales performance.

Third, the pressure of short-term debt increases, but the potential solvency is strong.

In 2021, the poor performance of the related indicators of the three red lines of Zhongjiao is mainly due to the rapid increase in short-term interest-bearing liabilities, but we think that this does not mean that the company's solvency is weak. As a central enterprise, Zhongjiao has a strong financing advantage. In the case of the overall weak financing environment in 2021, Zhongjiao successfully registered 2 billion yuan with AA+ credit for the first time, and successfully issued 1.1 billion yuan through the final purchase ABS. Continue to develop new financing methods to support the sustainable development of the company.