Core ideas:
The leader of local state-owned enterprises has a long history and steady development. The company is the largest real estate listing platform under Beijing SASAC, with more than 50% of state-owned shares and a stable ownership structure. Since its establishment, the company has been based in Beijing, looking at the whole country, and has become one of the four local state-owned enterprises with a scale of more than 100 billion through many reorganization and integration and active land expansion.
The land reserve is of high quality and sufficient, and the fundamentals are more flexible. By the middle of 22 years, the company had 2237 million square meters of unsettled land reserves on hand, with a corresponding removal period of 5.7 years, of which 36 per cent were located in Beijing and 82 per cent were located in the core first-and second-tier cities. Over the past 21 years, the development and storage has been further focused, with sufficient reserves and high quality, with strong certainty of removal. With the advantage of soil storage, the company has shown strong fundamental flexibility since the market boom has declined. In October 22, the national sales ranking rose to 22nd, and sales improved significantly in September and October. Considering the company's recent active start-up, it is expected that future sales and fundamental elasticity will continue.
After 40 years of deep ploughing, the improvement of the Beijing market has fully benefited. First opened in Beijing has a deep reserve of word-of-mouth and resources, ranking first in Beijing for seven consecutive years from 15 to 21 years, with a market share of 16%. By the middle of 22, it had stored 8.03 million square meters, ranking first among housing enterprises. In the past 15 years, there are many restrictive rules for soil shooting in Beijing, the profit space of real estate enterprises has been reduced, the land supply rules have been simplified since the second batch in 21, the land quality and profit margin have been significantly improved, and the pre-sale conditions have been optimized. The first opening shares, as local state-owned enterprises in Beijing, are expected to benefit to a large extent in the future, through high-quality land-rapid opening-rapid removal to improve capital efficiency, achieve steady scale growth, and improve profitability.
Profit forecast and investment advice. The company has high-quality reserves, active construction, and greater flexibility in sales, settlement and profit margins. The current PB valuation is only 0.4 times. Considering the thickening of the accounts received in advance and the discount at the end of 22Q3, the net assets (B+) after discount is 30.8 billion yuan. We maintain the prior fair value of 7.22 yuan per share, correspond to a reasonable valuation of 0.6 times PB for 22Q3, and maintain a "buy" rating.
Risk hint. The improvement of the Beijing market is not as expected; the recovery of the industry boom is not as expected, affecting the sales scale and profit margin; the improvement of the policy environment is not as fast as expected; the financing environment is deteriorating.
