Backed by deep domestic investment in Xi'an, performance increased year-on-year, maintaining the “buy” rating Tiandiyuan released the first quarter report of 2023. The company achieved revenue of 3.191 billion yuan in the first quarter, an increase of 783.67% over the previous year; it achieved net profit of 16 million yuan (-27 million yuan in the first quarter of 2022). The company's sales have maintained a scale of 10 billion dollars, investment has maintained a certain intensity, unsold and uncarried resources are sufficient, the debt structure is continuously optimized, Xi'an is deeply cultivating its advantages to help improve profitability, and is optimistic that the company's future performance will continue to be unleashed. We maintain our profit forecast. The company's net profit for 2023-2025 is estimated to be 525, 6.49, and 761 million yuan, the corresponding EPS is 0.61, 0.75, and 0.88 yuan. The current stock price corresponding to PE is 6.5, 5.3, 4.5 times, and maintains the “buy” rating.
Performance increased year over year, and profitability was under pressure
The company achieved revenue of 3.191 billion yuan in the first quarter, an increase of 783.67% over the previous year; achieved net profit of 16 million yuan to the mother (-27 million yuan in the first quarter of 2022); achieved net operating cash flow of -1.77 billion yuan, with basic earnings per share of 0.0182 yuan. The high year-on-year increase in the company's performance was mainly due to a sharp increase in the carry-over area of completed and delivered projects over the same period last year, and the increase in land payment expenses led to a negative net operating cash flow. The company achieved gross sales margin and net profit margin of 13.75% and 0.97% respectively in the first quarter (24.79% and 6.64% for the full year of 2022, respectively), and profitability is under pressure.
Sales remained relatively stable, and a new residential land plot was added in Xi'an
The company achieved a contract sales area of 169,900 square meters in the first quarter, an increase of 9.90% over the previous year, with a sales area equity ratio of 70.5%; achieved a contract sales amount of 261,400 yuan, a decrease of 1.55% over the previous year, and the equity ratio of sales amount was 78.4%. The company acquired new residential land in the Xi'an High-tech Zone in the first quarter, planning to build an area of 222,600 square meters, corresponding to a total land price of 2,422 billion yuan. The company's equity ratio was 55%, and continued to cultivate its base in Xi'an. The company started a new construction area of 361,300 square meters in the first quarter, and the equity ratio of new construction projects reached 100%.
Debt pressure continues to drop, and financing costs are relatively high
The company's total interest-bearing debt in 2022 was 12.91 billion yuan, down 13% from the previous year; the 2023Q1 balance ratio was 86.91%, down 0.37 percentage points from the full year of 2022, and the debt structure continued to be optimized. Affected by the weak strength of its own capital, the company's financial leverage ratio is high. The cost of comprehensive financing in 2022 was 7.49%, which is higher than the mainstream level of the industry, and there is plenty of room for pressure reduction.
Risk warning: Relaxation of industry policies fell short of expectations, and sales recovery in Xi'an fell short of expectations.