occurrences

The company announced sales results for November. In a single month, the company achieved a contract sales amount of 22.2 billion yuan, a contract sales area of 1,466 million square meters, and an average sales price of 15,000 yuan/square meter.

Brief review

Sales continued to increase in a single month, and the annual target was basically achieved in the first 11 months. From January to November, the company achieved a total contract sales amount of 177.8 billion yuan, an increase of 36% over the previous year. It has completed 94% of the annual target of 190 billion yuan, and the sales target will be exceeded; the cumulative sales area is 10.69 million square meters, an increase of 31% over the previous year; and the average sales price is 16,000 yuan/square meter, the same as the same period last year. In terms of monthly performance, November achieved sales volume of 22.02 billion yuan, up 69% year on year, leading the industry in growth rate; sales area was 1,466 million square meters, up 92% year on year, an increase of 12pct over the previous month. According to Kerry's full-caliber sales list, in January-November, the company's sales volume ranked 14th, up 1 place from the previous month, and the overall sales growth rate of the top 10-20 housing enterprises was 8 percentage points higher. Since this year, in the overall declining environment of the industry, the company's sales growth rate has still ranked among the top ten of the top 40 housing enterprises, demonstrating the elasticity of growth.

Land acquisition efforts have continued to pick up. In terms of land acquisition in a single month, a total of 5 plots of land were added in November, including Shenzhen, Qingdao, and Huizhou, and 1.15 million square meters of planned area, an increase of 54% over the previous month, a total amount of 5.6 billion yuan, an increase of 22% over the previous month, and a sales and investment ratio of 3.1, which is at a high level; land acquisition accounted for 25% of the sales amount, an increase of 1 pct over the previous month, and land acquisition efforts continued to pick up. Judging from the new projects received in a single month, the average premium rate is only 2.2%. The Ningbo, Huizhou, and Shenzhen projects are over 200,000 square meters, and the Ningbo project is close to 400,000 square meters. Among them, the Shenzhen Pingshan Jiangshan Project is the first joint acquisition of land in Shenzhen since the company cooperated with Huayanan. The average land price is 8830 yuan/square meter, and the surrounding area is selling new properties of 30,000 to 42,000 yuan/square meter; the floor price of the Ma'an project in Huizhou is 5501 yuan/square meter, and the surrounding new housing sales price is 9600-16,900 yuan/square meter. Recently, with the gradual relaxation of policies in various parts of the Bay Area, there is a basis for the market to return to activity, and the profit margin of the project is expected to be maintained relatively well.

Looking at the cumulative land acquisition situation since this year, in January-November, a total of 60 new projects were added, an additional planned area of 12.42 million square meters was added, and the cumulative equity acquisition was 45.9 billion yuan. The equity ratio was 75%. The equity ratio remained higher than the previous year, and the land acquisition amount accounted for 34% of the sales amount. In terms of structure, the company continues to focus on Tier 2 and Tier 3. Among them, Tier 1, 2, and 3 cities account for 3%, 60%, and 37% of land acquisition amounts, while still focusing on core second-tier and stronger third-tier cities.

The advantages of financing continue to be maintained, and the organizational structure has been upgraded and improved to ensure organizational efficiency. Last month, the company completed the issuance of senior notes with a total coupon interest rate of US$500 million and 6.45%, and financing activities have been carried out normally. Since this year, the company has further transitioned to a three-level management model of “big platform+small group+project cluster”. After the establishment of the Jiangsu Regional Group in June, it has formed 6 regional groups in Zhejiang, Jiangsu, Anhui, Shanghai, Southwest China and Shandong. The improvement in organizational efficiency has ensured that the company has achieved high sales elasticity this year. In the future, the number of regional groups will increase to 8-12, and each region will achieve sales of 30-40 billion dollars to support the “Second Five-Year Plan Strategy” goal. We continue to be optimistic about the company's performance after fully unleashing organizational vitality and efficiency.

Investment ratings and profit forecasts: The company focuses on developing Tier 1 and 2 and strong third-tier cities around urban agglomerations, and has achieved rapid growth since its listing in 2012; it has outstanding strategic forecasting capabilities in the land market, and has obtained high-quality land storage in a large number of core urban agglomerations through this; it has excellent financial control capabilities, and financing costs are at a low level within the industry. The company is one of the few listed housing companies that are “all good students”. It focuses on the balance of scale, profit, and risk. The release of future demand will still be concentrated on core urban agglomerations. Focusing on strategies and large amounts of high-quality land storage will also help the company continue to open up room for growth in the future. It is estimated that the company's EPS in 2019 and 2020 will be 0.9 yuan and 1.12 yuan respectively, maintaining the “buy” rating.

Xuhui Holding Group (00884) Sales continued to increase, and cooperation entered Shenzhen for the first time