Core ideas:

As a typical Fujian housing enterprise, Runxin China has a more radical investment style in the past, but after the strict price control policy, the company has turned to stability, which is mainly reflected in two aspects: the investment is tilted to the Yangtze River Delta and first-and second-tier cities, and the projects are located in the core areas, which is highly deterministic and conducive to the steady growth of performance. And try to reduce the cost of land by means of cooperation, old reform, acquisition and merger. In terms of finance, the three red lines reached the standard and were successfully promoted to green housing enterprises.

First, against the trend to achieve the sales target, the Yangtze River Delta contributed 75% of the performance

In 2020, Rongxin China attached importance to the elimination of sales and exceeded the sales target against the trend. The annual sales volume reached 155.17 billion yuan, an increase of 9.8% over the same period last year. We believe that the reason why Rongxin China is able to achieve stable sales growth is that the Yangtze River Delta urban agglomeration, which is the main layout of enterprises, is the most dynamic urban agglomeration in China, and the real estate market is strong under pressure, contributing 75% of the company's performance share. It is a strong guarantee for the growth of enterprise sales.

Second, the investment tends to be at a high energy level, which will increase the proportion of diversified land acquisition.

The average cost of new land in Rongxin China is 9596 yuan per square meter, up 44.3% from the same period last year, mainly for two reasons: first, the investment layout of Rongxin China is tilted to the core areas of the Yangtze River Delta region and first-and second-tier high-energy cities; second, Rongxin China's way of acquiring land is mainly based on bidding, while the competition in the land market is becoming increasingly fierce, prompting enterprises to take the average price of land.

Third, the three red lines are all up to the standard. 2021 gross profit margin is expected to be 13% 15% in 2020. Rongxin China's profit indicators all show a downward trend. With the gradual completion of high prices, the company's gross profit and gross profit margin will gradually improve in 2021. However, the government price limit policy still exists, so the improvement of profit indicators is not achieved overnight, but a gradual rebound. Gross profit margins are expected to rise to between 13% and 15% in 2021. Under the pressure of the three red lines, Runxin China retreated to seek stability, set the reduction of leverage as the primary goal, optimized the debt structure, and achieved the full green of the three red lines on the premise that the amount of equity investment increased by 74.2% compared with the same period last year.