Description of the event
The company's revenue in 2022 was 39.58 billion yuan (-7.1%), net profit of -2.88 billion (2021 profit of 110 million), and a comprehensive gross profit margin of 24.1% (-3.4pct). 2023Q1 revenue was 6.09 billion (-25.6%), and net profit of the mother was 170 million (+269.9%).
Incident comments
Factors such as declining gross margin, negative investment returns, and the calculation of asset impairment preparations led to loss of performance. In 2022, the company achieved revenue of 39.58 billion yuan (-7.1%), of which development business settlement revenue was 33.5 billion yuan (-6.0%), compared to 84.6% of Gubi:
Revenue from the investment property and related services business was 4.34 billion yuan (-14.1%), accounting for 11.0%; the total revenue of other businesses such as hotels, management and export, and property was 1.74 billion yuan (-10.2%), accounting for 4.4%. The return performance loss of $2.88 billion was mainly caused by declining gross margin, negative investment returns, and asset and credit impairment. The company's comprehensive gross margin fell 3.4 pct to 24.1% year on year in 2022. Among them, development business settlement gross margin fell 1.6 pct to 20.4% year on year, and gross margin of self-owned property fell 11.1 pct to 53.0% year on year; net investment income loss of 2.16 billion yuan (loss of 1.44 billion yuan in 2021); asset and credit impairment losses of 1.57 billion yuan (loss of 1.49 billion yuan in 2021). Revenue of 2023Q1 was 6.09 billion (-25.6%), and investment income turned a loss into a profit, income tax rate, and the decline in minority shareholders' profit and loss contributed to the return performance of 170 million (+269.9%).
Sales rankings have improved, and there is plenty of land available for sale. In 2022, the company had sales of 56.8 billion yuan (-21,9%), sales area of 2.27 million square meters (-20.9%), and an average price of 25,000 yuan/square meter (1.2%). Sales fell along with industry trends, and the industry ranking bucked the trend and rose 14 places to 33rd place: 2023Q1 sales were 11.73 billion (+1.6%). Eight new projects were acquired in 2022 (16 in 2021), with a land acquisition amount of 9.6 billion yuan (-69.6%), a land acquisition area of 790,000 square meters (-75.8%), and an average land acquisition price of 12110 yuan/square meter (+25.3%). The increase in average price was mainly due to an increase in the energy level of the layout city. The newly acquired projects were located in Chongqing, Chengdu, Nanjing, Hangzhou, Suzhou, Beijing, etc.; the land acquisition intensity in terms of amount and area size was 16,9%, 34.9%, and replenishment efforts were neutral. By the end of 2022, the value of the company's saleable soil storage was about 190.5 billion yuan, corresponding to a sellable cycle of 3.4 years, which guaranteed sales growth.
Revenue from self-owned businesses bucked the trend after restoring rent-free use, and commercial operations progressed steadily. Consumption came under pressure in 2022 and the repeated impact of the epidemic. The company's shopping mall sales were 25.4 billion yuan and self-owned property revenue was 4.34 billion yuan (-14.1%). If the rent-free 1.03 billion were restored, it would achieve revenue of 5.36 billion yuan, an increase of 6.2% over the previous year. Commercial revenue bucked the trend, showing strong resilience.
The company opened 4 new projects in 2022. By the end of the year, the company had deployed 46 commercial projects (29 heavy assets plus 17 light assets), and had opened 29 shopping malls (commercial area of 3.04 million square meters). Of these, 18 were Joy City Shopping Mall (commercial area of 2.65 million square meters, including light assets), with a large reserve of rooms. The strategy of focusing on parallel efforts made substantial progress.
The debt structure was optimized, financing costs declined, the company's interest-bearing debt was 76.42 billion (+6.4%) in 2022, long-term debt accounted for 78.7% (+4.2pct), and the debt structure was optimized, and financing costs fell to 4.82% (-0.1pct). As of the end of 2022, the net debt ratio was 84.0% (-6.1pct), the short-term cash debt ratio was 2.3X (+0.87X), and the balance ratio after excluding advance collection was 74.1% (+3.8pct).
Investment advice: Release the pressure on performance fully and pay attention to the progress of the company's plan to reverse losses and increase profits. The pressure on the company's performance was fully released in 2022. In 2023, value creation and profit were the primary goal, every effort was made to reverse losses and increase profits, and focus on marginal improvements in the later stages. It is predicted that the company will return a net profit of 74/1,10/1.7 billion in 2023-2025, and that the 2024-2025 performance growth rate will be 47% and 55%. The corresponding PB will be 0.97/0.91/0.83X, giving the child an “increase in holdings” rating.
Risk warning
1. In the end, the company's settlement gross margin fell short of expectations;
2. The company lost investment income and calculated a large amount of asset impairment.