Performance comments: in 2020, the company achieved operating income of 67.8 billion yuan, an increase of 34% over the same period last year, gross profit decreased to 25.1% due to inventory removal, and net profit was 5.9 billion yuan, an increase of 41% over the same period last year. In terms of business, other income from property development, operation of hotel / property management and sales of commodities, and property investment income accounted for 95.0%, 4.6% and 0.4%, respectively, and the corresponding amounts were 64.4 billion yuan, 3.1 billion yuan and 300 million yuan, respectively. Structurally, the real estate business is the core of the company's revenue contribution.
The main business of real estate sales and rebate double break hundreds of billions, to achieve a national layout at the same time to the regional deep ploughing forward. In 2020, the full-caliber sales of the company's real estate business exceeded 133 billion yuan, an increase of 13% over the same period last year. CAGR reached 51% in 16-20 years, and the company firmly ranked among the top 30 in the country. The company focuses on Guangdong-Hong Kong-Macau Greater Bay Area, covering the core areas of South China, Midwest, East China and the Bohai Sea, realizing the national layout.
Diversify land acquisition, optimize soil storage structure, and create a benchmark for urban renewal in the Dawan area. By the end of 2020, the total construction area of the company's land reserve has reached 57.18 million square meters (71% of the equity ratio). If the potential reserve of urban renewal is taken into account, the total value of goods can reach 1.2938 trillion yuan, of which the first-and second-tier cities account for 82%. The third-and fourth-tier cities account for 18%, and the marketable resources are abundant and of high quality. The company takes the acquisition and acquisition mode as the main land reserve supplement channel. 57% of the new land reserves in 2020 come from mergers and acquisitions, 16% rely on urban renewal and other ways, and 27% rely on public bidding. Diversified land acquisition methods highlight the company's advantages.
The three red lines remain yellow, and the debt duration structure is constantly optimized. By the end of 2021, the company excluded the advance accounts receivable asset-liability ratio of 78.9%, slightly more than 70%, cash-to-short debt ratio (1.34) and net debt ratio (82.7%) were significantly better than the regulatory level, while the Olympic Park actively managed the scale of debt. it plans to reduce interest-bearing liabilities by 5 per cent a year between 2021 and 23 to optimize the asset-liability structure. The company's debt payable within one year was 46% at the end of 2020 and dropped rapidly to 40% in March 2021, and the pressure on short-term debt will continue to decline in the future.
Diversified development, open up a new curve of growth. The company carries out diversified business, including the second anniversary of the listing of the Olympic Garden Health, steadily improving its performance, building a medical health and health care wisdom pension model, with a revenue of 1.41 billion yuan in 2020 and a net profit of 250 million yuan. Aoyuan Meigu fully develops its beauty and health business, strategically cuts into the medical and beauty track, acquires 5A-class medical beauty institution Liantianmei, injects high-quality assets, and deeply participates in the operation of Shanghai Aoyuan Meigu. Cultural travel business to create a fashion tourism destination, the Spring Festival in 2021 to receive more than 80,000 tourists, hotel occupancy rate of more than 90%.
Profit forecast and investment advice: it is estimated that the company's EPS for 2021-2023 will be 2.59max 2.99bin3.33 respectively. Taking into account the strong sales growth, high-quality land reserves brought about by urban renewal and the gradual blossom of diversified business, we give the 2021 results 4 times the target price of PE, of HK $12.19, with a "buy" rating for the first time.
Risk tips: sales are not as expected, profit margins are not as expected, and urban renewal transformation is not as expected.