Event: the company announced its mid-term results in 2022, with operating income of 162.36 billion yuan in the first half of the year,-30.9% year-on-year, net profit of 612 million yuan,-95.9%, and basic earnings per share of 0.03 yuan per share,-95.7% of the same period last year.
The bottom performance of the industry is under pressure, and the cost control is continuously optimized. In the first half of 2022, the company achieved revenue of 162.36 billion yuan, year-on-year-30.9%, gross profit of 17.21 billion yuan, year-on-year-62.8%, core net profit of 4.91 billion yuan, year-on-year-67.7%, and net profit of 612 million yuan,-96.0% over the same period last year. Affected by the overall downward superimposed epidemic outbreak and extreme weather and other factors, many profit indicators of the company are under pressure, but still achieve positive profits. The company's gross profit margin and net profit margin in the first half of the year were 10.6% and 1.17% respectively, which decreased by 9.10pct and 8.35pct respectively compared with the same period last year, mainly because 1) some plots with higher land prices obtained in 17-19 entered the settlement period; 2) the disposal of some precipitated assets during the period led to a decline in profit margins. In the first half of the year, the company's sales expenses and management expenses decreased by 40.6% and 31.0% respectively compared with the same period last year, the sales rate decreased by 0.4pct to 5.5%, and the ability of cost control continued to improve.
The scale of sales is the leading in the industry, and the land is carefully focused on the deterministic area. In terms of sales, in the first half of 2022, the company achieved equity sales of 185.1 billion yuan, year-on-year-38.9%; equity sales area of 2348 million square meters, year-on-year-32.0%; the average sales price was 7883 yuan per square meter,-10.2% of the same period last year. The company's sales scale remained ahead of the industry, and the decline was better than the average level of 12pct of the top 100 real estate enterprises. The cash rebate of equity is 170.29 billion yuan, and the rate of equity rebate is 92%, which has been stable at more than 90% for seven consecutive years. From a regional point of view, the sales amount of first-tier, second-tier and third-and fourth-tier cities accounted for 3%, 28% and 69% respectively.
In terms of land acquisition, the company adheres to the investment principle of prudently obtaining high-quality opportunity land. In the first half of the year, the company acquired land with low premium rates in Foshan, Zhangjiakou, Lanzhou and other places, and acquired 9 new projects with an equity premium of 6.1 billion yuan. 78% of the new land is located in five metropolitan areas. As of the first half of the year, the company's rights and interests can be sold with a total of 1.2161 trillion yuan, with sufficient supply. Future replenishment will focus on the core location and layout of cities with a good relationship between supply and demand, in order to support the steady development of performance.
The overall financial situation is sound, and the three red line indicators have improved. As of the first half of 2022, the company's interest-bearing liabilities totaled 293.68 billion yuan, down 7.6 percent from the end of 21, including 52.973 billion yuan in short-term loans, down 17.7 percent from the end of 21. The company effectively achieved active optimization of the debt structure. In terms of the three red lines, the asset-liability ratio of the company excluding advance receipts is 72.1%, and the net debt ratio is 48.1%, which is improved by 5.2pct and 1.6pct respectively compared with the same period last year. By the end of the first half of the year, the company's available cash balance was about 147.98 billion yuan; the net operating cash flow was 5.25 billion yuan, of which sales rebates and other operating inflows, land and project payments, and taxes were 1802.8 yuan,-1355.3 yuan and-39.5 billion yuan respectively. The company finally realized positive operating cash flow by speeding up the efficiency of sales rebate, strictly returning to work and arranging for fixed production, and maintained a sound financial position. In addition, in May, the company became one of the first demonstration private housing enterprises in China to issue corporate bonds with credit protection tools, issuing 500 million yuan of corporate bonds. and actively promote the issue of winning tickets with the support of the recent Dealers' Association and the credit guarantee of China Bond. At present, there are no maturing overseas priority bills this year, and it is expected to give full play to the leading role of exemplary housing enterprises and smoothly through the cycle.
Increase the capacity of science and technology to enhance market competitiveness. The company continues to increase the layout of new business tracks such as scientific and technological wisdom construction system and upstream and downstream industrial chain, and has established a science and technology construction group, focusing on new technologies and systems such as construction robots, BIM digitalization, and new prefabricated buildings. By the end of July 2022, 30 construction robots have been put into commercial applications, with services covering 28 provinces, more than 550projects, cumulative delivery of more than 1200 units, and cumulative application construction of more than 1000 square meters. The competitiveness of the company's main real estate development is expected to continue to improve in the future.
Investment suggestion: as the leader of private housing enterprises, the company's performance is affected by the fluctuation of the industry as a whole, but the sales scale still maintains the leading position in the industry, the soil storage resources are rich, and the investment focuses on the core areas. At the same time, the continuous optimization of the company's debt structure and the overall financial stability will support the steady development in the future. Taking into account the overall downward trend of the industry, we forecast that the company's operating income for 22-24 will be 4669 yuan, 4318 yuan and 405.4 billion yuan respectively (the previous value is 5504). The net profit will be 137,130 and 12.5 billion yuan respectively (the previous value is 271), and the EPS will be 0.56,0.53,0.51 yuan per share (the previous value is 1.171,23,1.26).
Risk tips: lower-than-expected performance, tighter regulation and control policies, macroeconomic fluctuations
