Main points of investment:
Events. The company publishes its 2020 annual report. During the reporting period, the company achieved operating income of 11.552 billion yuan, a decrease of 13.02% over the same period last year, and a net profit of 1.378 billion yuan, a decrease of 41.11% over the same period last year. The company intends to pay a cash dividend of 1.38 yuan (including tax) to all shareholders for every 10 shares on the basis of undistributed profits.
During the reporting period, affected by the decrease in the number of projects with the conditions for carrying forward operating income compared with the same period in 2019, the company realized operating income of 11.552 billion yuan, a decrease of 13.02% compared with the same period last year. Due to the fact that the proportion of low gross profit items in the reporting period was higher than that in the same period in 2019, the company achieved a net profit of 1.378 billion yuan, a year-on-year decline of 41.11%.
In 2020, China Star Group achieved a profit of 1.394 billion yuan, exceeding the "three-year profit commitment". At the same time, the company paid a cash dividend of 841 million yuan in 2019, accounting for 35.95% of the net profit of shareholders belonging to listed companies.
During the reporting period, the company worked hard to expand land resources, implemented the development model of high-turnover projects, started work five months after the acquisition of land, reached the pre-sale conditions and opened eight months after the start, and accounted for more than 60% of the opening volume. The removal rate reached 90% in three months, and 60% of the funds were returned in three months.
In 2020, the company signed a total of 8.357 billion yuan in sales projects, with a return of 8.051 billion yuan. During the reporting period, the company realized sales of 8.356789 billion yuan, sales area of 156111.65 square meters, carry-over income of 10.4121691 billion yuan, carry-over area of 350028.92 square meters (excluding parking spaces), and carry-over area of 407105.75 square meters at the end of the reporting period.
By the end of the reporting period, the financing balance of the company was 14.489 billion yuan, including 5.343 billion yuan for bank loans, 8.151 billion yuan for corporate bonds, 995 million yuan for medium-term notes, and 4.62% of the weighted average annualized interest rate on financing costs.
According to the announcement on the establishment of a company and related party transactions jointly invested with Shanghai Real Estate Minhong (Group) Co., Ltd. on March 25, 2021, the company intends to enter into a related party transaction with Shanghai Real Estate Minhong (Group) Co., Ltd. to jointly fund the establishment of a new company with a registered capital of RMB 1.2 billion. Among them, the proportion of shares held by the company is 50.2%, and the subscribed capital contribution is 602.4 million yuan; the shareholding proportion of Minhong company is 49.8%, and the subscribed capital contribution is 597.6 million yuan. We believe that the company will take this opportunity to expand Minhang regional resources and explore the transformation of the development mode of production-city integration.
Investment suggestion: Shanghai has an important influential city to update the comprehensive development and operation enterprises, with a "neutral" rating.
The company is the main platform for market-oriented real estate development under Shanghai Real Estate Group. The company takes the middle and high-end commercial housing development as the core, and synchronizes the developers to run real estate, asset operation, community service, property management and other related industries. In the deep ploughing of the Shanghai market at the same time layout around Shanghai and the Yangtze River Delta region. We estimate that the EPS of the company in 2021 and 2022 is 0.34 yuan and 0.39 yuan respectively. Considering the gradual success of the company's transformation, the company is given a dynamic PE of 8-10 times in 2021, with a reasonable value range of 2.72-3.40 yuan, maintaining a "neutral" rating. Risk hint: the company faces two major risks: interest rate hike and policy regulation.
Risk hint: the company faces two major risks: interest rate hike and policy regulation.