The company is one of the few private companies whose leverage ratio meets the regulatory requirements and the financing cost is low. Although, like the industry, the company has entered an era of low growth, the proportion of operating income continues to increase, and the anti-cyclical ability increases significantly.
The performance is in line with expectations. In 2020, the company achieved revenue of 135.35 billion yuan, an increase of 21.4% over the same period last year. The core net profit was 12.28 billion yuan, an increase of 17.2% over the same period last year. In 2020, the company achieved sales of 300.31 billion yuan, an increase of 15.5% over the same period last year, and a sales area of 1712.6 million square meters, an increase of 16.8% over the same period last year. The company's sales target for 2021 is 330 billion yuan, an increase of 10% over the same period last year, and the completed area is 1150 million square meters, an increase of 16.5% over the same period last year.
The financial structure was further optimized and the cost of capital remained low. The company has always attached importance to financial discipline, at the end of 2020, the leverage indicators involved in the three red lines have reached the standard and become a green company. The net debt ratio was 50.3% (57.4% at the end of 2019), the asset-liability ratio excluding accounts received in advance was 68.1% (70.6% at the end of 2019), and the cash-to-debt ratio was 1.16 (1.05 at the end of 2019). Short-term debt accounted for 25.2% of the company's interest-bearing liabilities, down from 29.1% at the end of 2019, and the financial structure was optimized. At the end of 2020, the company's comprehensive financing cost was 5.6%, unchanged from 2019, and kept the industry low for a long time. We judge that as the credit risk of the development industry is exposed and funds prefer superior credit enterprises, the cost of capital of the company is likely to decline against the trend.
The quality of soil storage is high, and the gross profit margin is stable. At the end of 2020, the company's land reserve was 817.5 billion yuan, and the unit price of land storage was 5188 yuan per square meter, which was 29.6% of the company's average sales price in 2020. The company ploughs the core urban group, the salable value of Guangdong-Hong Kong-Macau Greater Bay Area and the Yangtze River Delta accounts for 53.6%, the land cost is reasonable, and the gross profit margin is expected to be limited and stable.
The strategy of large aircraft is proper, and the operating income continues to increase. In 2020, the company's revenue from hotels, business, entertainment and services reached 8.65 billion yuan, although affected by the epidemic, it also completed 99% of the revenue plan. The company expects professional companies to continue to grow steadily in 2021, with a revenue guidance of 15 billion yuan in 2021, accounting for 9.2% of our forecast revenue in 2021. The proportion of operating business continues to increase on the one hand to enhance the company's stability and anti-cyclical ability, on the other hand, it also provides some support to the company's market capitalization.
Risk factors: the downside risk of industry and company project profitability.
Investment advice: the company is one of the few private companies whose leverage ratio meets the regulatory requirements and has low financing costs.
As the credit risk of the industry is exposed, the company's cost of capital may fall. Like the industry, the company has also entered the era of low growth, but the proportion of operating income continues to increase, and the anti-cyclical ability increases significantly.
According to the pace of the company's settlement, we adjust the company's core EPS forecast of 2021, 2022, 2023 to 3.82, 2.27, 4.86 yuan (the original forecast, 2021, 2022, is 4.33, 5.21). We give the company 7 times PE, in 2021 corresponding to the target price of HK $31.73 per share, maintaining the "buy" investment rating.