The nuclear gross profit margin goes down, and the investment is active.
The company reported on August 29 that 2021H1 achieved revenue of 14.25 billion yuan, + 16.9% year-on-year, net profit of 600 million yuan, + 8.7% year-on-year, and diluted EPS0.14 yuan. Because the gross profit margin has dropped more than we expected, we expect the EPS in 21-23 to be 0.31,0.36 and 0.43 yuan (the previous value is 0.36,0.43 and 0.49 yuan), compared with the company's 9.7 times PE valuation in 21 years (consistent Wind expectation). The company has significant economies of scale, brand and financing advantages. We value the company 12.5 times PE in 2021 (12 times the previous value), and the target price is 3.88 yuan (the previous value is 4.32 yuan). Maintain the "overweight" rating.
Projects with low gross margin have entered the settlement, with a slight increase in performance.
During the period, the company's sales and settlement income grew steadily by 13.1%, but because the items with low gross margin accounted for a relatively high superimposed base effect during the reporting period, on the one hand, the gross profit margin decreased significantly, and the gross profit margin during the period was-21.2pct to 22.1% compared with the same period last year. On the other hand, it led to a substantial reduction in local tax increases, taxes and surcharges-48.1%. Looking forward to the second half of the year, as all the 17-year low-margin projects enter the settlement cycle, we expect the gross profit margin to have hit bottom, most of the loss-making items are basically set aside in 20 years, and we expect the results to be released steadily in the second half of the year.
The scale of sales is rising steadily and the Yangtze River Delta is actively laid out.
During the period, the company achieved sales (full caliber) of 35.96 billion yuan, + 20.3% year-on-year, sales area of 1.633 million square meters, + 37.9% year-on-year. During the period, the land was actively acquired, with a total land price of 21.5 billion, a land-to-sales ratio of 60%, and an average floor price of 11000 / flat, which is + 132% higher than the average price for the whole year of 20. The main reason is that the new projects are all distributed in the five core urban agglomerations, of which the Yangtze River Delta urban agglomeration accounts for 53%.
By the end of the period, the sales value of the company's land reserve is about 246.5 billion yuan, which is to impact energy storage on a scale of 100 billion yuan.
Steady growth of commercial real estate, giving priority to both
During the period, the scale of the commercial real estate sector was relatively stable, and the income of the investment property sector was 2.47 billion, compared with the same period last year.
By the end of the period, the company has opened 1.88 million commercial real estate projects, 17 reserve projects, with a total area of 1.76 million square meters, of which 5 projects will enter the market in the second half of the year, and the operating volume at the end of the year is expected to be + 35.1% compared with the same period last year. The company proposes to increase the expansion of light asset projects in the second half of the year, and actively explore the types of urban renewal, TOD, community commerce and so on. We believe that the company's expansion of commercial real estate in a manner of both importance and importance will not only promote the company's ROE, but also strengthen the company's brand premium in the field of commercial real estate operation.
Central enterprise background and commercial real estate support, maintain the "overweight" rating financial point of view, the company is yellow, the comprehensive financing cost is 5.06%, compared with 20 years-0.04pct. Due to the decline of the company's gross profit margin slightly more than we expected, we expect the EPS in 21-23 to be 0.31,0.36 and 0.43 yuan (the previous value is 0.36,0.43 and 0.49 yuan), with reference to the company's 9.7 times PE valuation in 21 years (Wind consensus expectation). The company's scale effect and financing advantage are significant. We value the company at 12.5 times PE in 2021, and the target price is 3.88 yuan (the previous value is 4.32 yuan). Maintain the "overweight" rating.
Risk tips: declining sales in the industry; low expectations of the company's de-marketing speed; and fierce competition in commercial real estate.