Event Overview

Kaisa Group released the 2020 annual report, the company achieved operating income of 55.85 billion yuan, an increase of 16.3% over the same period last year, and its mother's net profit was 5.45 billion yuan, an increase of 18.6% over the same period last year.

Growth of performance documents and optimization of financial position

In 2020, the company achieved operating income of 55.85 billion yuan, an increase of 16.3% over the same period last year, and its net profit was 5.45 billion yuan, an increase of 18.6% over the same period last year. By the end of the reporting period, the company's asset-liability ratio excluding accounts received in advance was 70.3%, down 5.6pct net debt ratio to 98% from the previous year, down 46.0 pct from the previous year, cash-to-debt ratio was 1.56, up 0.72 from the previous year, the overall leverage ratio continued to optimize, and two of the three red line indicators have reached the standard.

Sales hit a new high and land acquisition tends to be positive.

In 2020, the company achieved sales of 106.9 billion yuan, an increase of 21.3% over the same period last year, and a sales area of 6.165 million square meters, an increase of 32.8% over the same period last year. In terms of land acquisition, the company added 9.212 million square meters of land reserve area in 2020, and the total land price of rights and interests was 47.11 billion yuan, an increase of 73.1% over the same period last year, accounting for 44.1% of the sales amount in that year. Judging from the regional distribution of the new land reserves, the company's equity ratio in the Great Bay area, Yangtze River Delta, Central China, West China and Bohai Rim is 63%, 6%, 16%, 14% and 1% respectively, and the company continues to deepen the market layout in the Dawan area.

Deep ploughing the market in Dawan area, urban renewal to welcome the harvest

In 2020, the company has 201 urban renewal projects, covering an area of more than 50 million square meters. 86% of the projects in terms of goods value are distributed in Shenzhen and Guangzhou. In 2020, the company has exceeded its urban renewal target. In the future, the company will continue to focus on urban renewal, speed up the transformation of urban renewal projects, and further cultivate the market in Dawan area. The company will usher in the harvest period of urban renewal investment.

Investment suggestion

Kaisa Group continues to grow in performance and sales, with high-quality land reserves, outstanding advantages in urban renewal, and continuous optimization of its financial situation. We estimate that the company's 2021-2023 revenue will be $676, 835,000,000,000,000,000,000,000,000,000,000,000,000, corresponding to a PE of 3.4pm, 2.8cm, 2.3 (HK $1 = 0.8380), first coverage, giving the company a buy rating.

Risk hint

Sales fell short of expectations; profit margins fell.