Core views:
Affected by the slow recovery of the real estate market in Henan, the company's sales performance grew steadily, and the market share of the Henan region continued to maintain its first position. The overall decontamination rate was 66%, down from 2019. The company adheres to a prudent financial policy. Out of the three red lines, it has only stepped on one red line, and its overall financial situation is relatively stable.
1. The advantages of regional leaders are stable, and sales performance is growing steadily
Affected by the slow recovery of the real estate market in Henan (commercial housing sales area in Henan fell 1.2% in 2020), Jianye Real Estate achieved sales of 102,642 billion yuan in 2020, an increase of 1.5% over the previous year. The overall sales performance was basically the same as in 2019. The overall decontamination rate was 66%, down 6 percentage points from the previous year in 2019.
According to the Yihan Think Tank's “Top 30 Sales Performance of Typical Housing Enterprises in Henan Province from January to December 2020”, Jianye Real Estate is at the top of the list, and there is quite a gap between Jianye Real Estate and the second place. Jianye Real Estate's advantage in its base camp is quite obvious.
2. Deeply cultivate the base camp in Henan and further raise the safety margin
In 2020, Jianye Real Estate added a reserve of about 9.18 million square meters of construction area. The investment ratio was 1.03. The investment intensity declined to a certain extent compared to 2019 (investment ratio 1.4), and the overall investment was relatively steady. The average cost of land was 1,649 yuan per square meter, and the average cost of additional land accounted for 22% of the average sales price in 2020, down 10 percentage points from 2019, and the margin of safety further increased.
By the end of 2020, the land reserve was 54.1133 million square meters, which was enough to support the company's 4-5 years of development. The land reserves were relatively abundant.
3. The asset-light business is booming. The business gradually expanded outside the province. In 2020, the company's subsidiary Zhongyuan Jianye used the company's brand advantages and resource advantages in the regional market to carry out management output and resource export. In 2020, 80 new asset-light projects were signed, with a total construction area of 8.58 million square meters; sales for that year reached 34.3 billion yuan. Furthermore, unlike the company's asset-heavy projects, which focus on Henan, asset-light projects have gradually expanded outside the province. By the end of 2020, there were 13 projects outside the province, distributed in the six provinces of Hainan, Xinjiang, Shanxi, Shaanxi, Hebei and Anhui.
4. Operating income has increased dramatically, and the financial situation is relatively stable
In 2020, Jianye Real Estate achieved main business revenue of 43,321 billion yuan, an increase of 40.75% over the previous year, mainly due to an increase in delivery area. In the context of the overall decline in gross profit margin in the real estate industry, the company's gross profit margin also fell from 26.0% in 2019 to 19.9% in 2020, down 6.1 percentage points from the previous year. The company's net profit margin fell 3 percentage points to 4.85% due to falling gross profit margin and losses on foreign exchange forward contracts and foreign exchange options. The company's net profit was 1,802 million yuan, a year-on-year decrease of 10.60%.
In 2020, the company firmly implemented the principle of prudential finance in terms of investment. The company's total interest-bearing debt was 31.30 billion yuan, and the scale of interest-bearing debt remained stable. This also met the requirements for the company to enter a period of strategic consolidation. In terms of the three red lines, the company has only stepped on a red line, and its financial situation is relatively stable