In 2020, the company's settlement income was flat, and the sales expense rate rose sharply under the influence of product structure, resulting in a significant decline in performance compared with the same period last year. However, we note that the company's investment real estate has a high margin of safety, the acquisition of land is aggressive, the leverage ratio is low in the industry, financing costs remain low, sales growth is expected to be 40%, and the export of light assets is becoming more and more popular. We believe that the company is currently the most valuable small and medium-sized market capitalization enterprises in the real estate sector.
The company's current performance is affected by insufficient settlement scale, expense rate, equity ratio and other factors. In 2020, the company achieved operating income of 21.705 billion yuan, an increase of 1.19% over the same period last year; net profit of 3.249 billion yuan, down 15.43% from the same period last year; and net profit of 1.55 billion yuan of shareholders belonging to listed companies, down 36.20% from the same period last year.
The volume of development has increased, and the scale of sales is ready to start. At the end of 2020, the company is planning to build an area of 20.42 million square meters, an increase of 7.9% compared with the same period at the end of 2019. As the company accelerated the progress of development, the area under construction increased by 18.4% compared with the same period last year, reaching 1.03 million square meters. The company increased its land reserve by 2.77 million square meters in 2020, accounting for 256% of the sales area of that year, and is the most active company in relative land sales in the whole market. The enterprising situation determines that the goods value of the company in 2021 is sufficient, and the company reveals that in the next five years, the sales contract plans to achieve an annualized growth rate of 40%, and the contract sales target of 2021 will reach 38 billion yuan.
Leverage is low and financing costs remain low. The company's net debt ratio was 20.1% at the end of 2020, up from 19.8% at the end of 2019, but still significantly lower than the three red lines and significantly lower than the industry average. The overall average financing cost of the company is 5.47%, which is significantly lower than that of 5.99% at the end of 2019. And the size of short-term interest-bearing debt has fallen sharply by 53% to 4.57 billion, and the proportion of short-term interest-bearing debt to total interest-bearing debt has dropped from 45% to 20%. In the current tight financing environment, the long-term debt structure is extremely advantageous.
The investment real estate subject has a high gold content and provides a margin of valuation safety. The company's book investment real estate is 53.6 billion yuan, of which 50% are located in three first-tier cities (Beijing, Shanghai and Shenzhen), and 37% are located in core second-tier cities such as Wuhan, Hangzhou and Shenyang. The investment real estate of the whole company is located in a good area. strong realizability. We believe that the company's net worth is highly solid and highly defensive.
The operating capacity has been significantly improved, and progress has been made in the expansion of light assets. The company's annual rental and management fee income was 1.149 billion yuan, which was 1.5% lower than that in 2019. However, we expect to benefit from economic recovery and the completion of new projects in the future, operating income will increase steadily (the company expects to achieve rental and management fee income of 1.49 billion yuan in 2021). The company signed six light asset export projects (business and theme entertainment) at the end of the period, fully demonstrating the improvement of the company's management ability after taking office with rich business management experience. Since light assets are not subject to leverage, we believe the company will optimize the quality of profit growth after 2021.
Risk hint: the possibility that the company's office buildings will continue to be hit by factors such as the epidemic and telecommuting.
Time is Shimao's friend and is optimistic about the investment value of the company. We believe that the company has three core advantages: first, the Shimao Group, which relies on high credit, enjoys the lower capital cost of the head company on a smaller scale, and adjusts its debt structure in advance without a large number of short-term refinancing requirements. The leverage ratio is low, and there is room for further leverage to pursue development; the second is to introduce core talents to improve the ability of commercial real estate operation and management, the proportion of operating profits in the company's profits is expected to continue to rise, and the output of light-asset brands is expected to speed up. Third, investment real estate is concentrated in the core metropolis, although the value of the office market is controversial, but we firmly believe that the office building in Qianhai in Shenzhen is still a better asset than the shopping malls in third-and fourth-tier cities. Despite the decline in the company's performance in 2020 compared with the same period last year, the company currently has less than 0.7 times the expected dividend yield of 3.7% at the low point of performance. We give the company 2021, 2022, EPS forecast 0.69, 0.86, and 1.12 yuan per share in 2023 (the original 2021 / 22 EPS forecast is 0.72, 0.91 yuan per share), and give the company a target price of 1 times PB in 21 years, that is, 7.48 yuan per share. Maintain a "buy" investment rating. We believe that the company's valuation based on PB is more appropriate because the company's core assets are highly realizable, inefficient assets are few, and the balance sheet is highly secure.