Core viewpoints
The company's family holds 65.7%, and Fitch and S & P both give the company a B rating and look to stability.
Rapid sales growth, deep ploughing and opening up new areas coexist. The sales ranking of Chinese real estate enterprises released by the company from January to June 2020 ranked 81st in full-caliber sales, and 89 in 2019, with a sales value of 27.41 billion yuan, with a five-year compound growth rate of 61.2%. Mainly located in Nanchang, Jiangsu and Zhejiang, Jinan, Guangdong, Hefei, Tianjin, Quanzhou and other regions. The company has a land reserve of 14.563 million yuan, mainly located in Nanchang, Hefei, Jinan, Tianjin, Wuhan and other regions. The company was newly stationed in Wuhan, Ningbo, Nantong, Suzhou in 2018, and Foshan, Huizhou, Qingyuan, Changsha, Huanggang, Macheng, Enshi and Chongqing in 2019 to provide assistance for future development (the surrounding cities included in the above company regional division).
The land cost of the company is relatively low in the past two years, and it is expected to have better profits in the future. The ratio of land acquisition to sales in 2018 and 2019 is 68.2% and 49.5% respectively. As a growing housing enterprise, strengthening land acquisition is the only way for development. The ratio of land price to house price is 24.4% and 39.4% respectively, and the cost of taking land can be controlled, which provides a certain margin of safety for the profit margin. It is estimated that the overall net profit margin is 8.8%.
The performance guarantee coefficient is high, and there is room to improve the operational efficiency. The company's revenue growth is steady, with revenue of 8.6 billion yuan in 2019, 27.7% of the same period last year, and the performance guarantee coefficient is 1.81, which is in the middle to high level. In 2019, the profit and loss of minority shareholders accounted for 33.3% of the net profit, the minority shareholders' rights and interests accounted for 46.2%, and the scale of foreign cooperation expanded. With the increase in the proportion of three fees, there is still room to optimize the efficiency of management and control of the company.
The debt service target is medium, and new long-term bonds are issued to improve the debt structure, and multi-channel funds are needed to repay the debt. The company's cash-to-short-debt ratio in 2019 was 0.92, the asset-liability ratio excluding contract liabilities was 79.5%, and the net debt ratio improved to 59.0%. The company's operating cash flow returned to positive in 2019. Corporate loans are obtained by assets, equity mortgages and guarantees, the proportion of mortgaged inventory increases, the proportion of mortgaged investment properties decreases, and the occupation of related party funds is relatively low.
Combined with the sales from January to June 2020, the cash flow pressure is calculated. In terms of repayment of short-term debt only from contractual sales, the company is under some pressure to consider repaying loans through cash on hand and other capital channels to ensure subsequent expansion of land reserves through sales rebates.
To sum up, the company's solvency has a margin of safety. Combined with the coupon of corporate bonds and the performance of the secondary market, it is recommended to pursue high investment returns.
Risk tips: policy risk, financing risk, credit risk, unfinished sales risk, etc.