Event: the company released the annual report 2020. during the reporting period, the company achieved operating income of 36.134 billion yuan, year-on-year + 10.9%, home net profit of 2.65 billion yuan, year-on-year + 5.8%, and core net profit of 3.3 billion yuan, + 18.9% year-on-year.
The core net profit margin is + 0.6 pct, and the efficiency of high-quality growth management and control is continuously optimized. During the period, the company achieved a gross profit margin of 19.1%,-0.9 pct compared with the same period last year. The decline in gross profit margin is a common problem faced by the industry in which high land price projects acquired in 2016 / 18 have entered the carryover channel; the net profit rate is 7.3%,-4.7 pct year-on-year; and the core net profit rate is 9.1%, + 0.6 pct year-on-year. By the end of the period, the contract debt was 60.87 billion yuan, + 56.9% year-on-year, covering 1.31 times the revenue in 2020. In terms of expense rate, the sales fee / revenue during the period is 6.4%, which is-0.3pct compared with the same period last year, and the management and control efficiency has been optimized for three consecutive years.
Target sales increased steadily, and the ratio of land ownership to land ownership remained at a relatively high level. During the period, the company achieved sales of 141.9 billion yuan, + 8.6% compared with the same period last year, and the target completion rate for the whole year was 101.4%. The company's target sales in 2021 was 150 billion yuan, which was 5.7% higher than the actual sales in the current period; the sales area was 8.9 million square meters, + 5.4% over the same period last year; and the average sales price was 15949 yuan / flat, + 3.0% compared with the same period last year. In terms of sales structure, the proportion of Yangtze River Delta, Hercynian and central China is 38.6%, 33.2% and 9.5% respectively, while that of first-and second-tier cities is 0.2%, 89.3% and 10.5%, respectively. Fuzhou and Nanjing rank first and second respectively, accounting for 19% and 14% respectively. In terms of salable value, the company can sell about 250 billion yuan to 270 billion yuan in 2021, and the annual sales target of 1500 can be achieved by reaching 60% of the elimination level. In terms of land acquisition, the company took 713.8 million square meters of land during the period, + 27.5% compared with the same period last year; the amount of land acquired was 47.22 billion yuan, + 41.4% compared with the same period last year; the floor price was 6616 yuan / flat, + 10.9% year-on-year, and the average floor price / sales price was 41.5%, + 7.7pct, mainly due to the way the company acquired land, mainly by recruitment, auction and hanging, which was greatly affected by the rising heat of the land market. During the period, the proportion of land area equity and combined surface area is 70% and 81% respectively, and the management said that the future land ownership ratio and surface ratio will remain above 60% and 70% respectively. In terms of land reserve, at the end of the period, the land storage area of the company is 2845 square meters, the total value of goods is about 500 billion yuan, the average cost is 4919 yuan / square, and the proportion of the company's rights and interests is 58%.
Financing costs continue to be optimized, and the three red lines are temporarily in the yellow file. During the period, the weighted average financing cost of the company was 6.50%, which was-1pct compared with the same period last year, in which the proportion of non-bank loans decreased from 20% to 5.9%, and the proportion of bank loans increased from 42% to 56.1%. Debt swap optimizes financing costs. In terms of the three red lines, the company recorded an asset-liability ratio (excluding prepayment) of 76.57%, year-on-year + 0.51pct; net debt ratio of 64.7%, year-on-year-10.5pct; cash-to-debt ratio of 2.2, year-on-year + 0.44, three red lines temporarily in the yellow file. In terms of debt maturity, short-term debt accounted for 29.1%, year-on-year-5.1pct; long-term debt accounted for 70.9%, year-on-year + 7.75pct, the debt maturity was extended.
Investment advice: the company is given a buy rating for the first time. It is estimated that the company's EPS in 2021-23 will be 0.67 PE 0.74 RMB, and the corresponding PE 5.70 times.
Risk hints: there are repeated uncertainties in the epidemic; performance forecasts and valuation judgments are not up to expectations.