Summary:
Real estate business: eye-catching growth rate, incentives in place, layout optimization
In 2020, the company's sales volume under the impact of the epidemic reached 223.8 billion yuan, an increase of 14% over the same period last year; the company's contracted sales area was 16.853 million square meters, an increase of 9.4% over the same period The scale of sales has increased nearly tenfold in the six years from 2015 to 2020. In recent years, the company has adhered to the fast turnover model and fully encouraged the front-line team, resulting in a rapid increase in sales scale and superimposing the company's reasonable urban layout structure. It is expected that the company's performance will continue to release in the future.
Construction business: high-quality engineering level, steady cooperation with real estate co-development company has more than 20 years of construction experience, with a variety of related qualifications and patents.
In 2020, the contract value increased by 30.68 billion yuan, an increase of 10.4% over the same period last year, and the gross profit margin of the construction business was 8.65%. The performance was stable. The construction business was not only a supplement and supplement to the real estate business within the group, but also a platform for external construction of other important projects.
Improved profitability and balanced long-term and short-term debt structure
At the end of 2020, the company's interest-bearing debt was 79.9 billion yuan, of which the short-term debt was 23.37 billion yuan, accounting for 29.25%. The long-term and short-term structure is more balanced. The company's ROE reached 28.2% in 2020, a new high, and is in the upstream level in the industry, mainly benefiting from the increase in net interest rate.
Profit forecast and valuation:
As the company's strategy is different from the leveraged operation of traditional real estate companies, but with high turnover operation and high-quality development as the core, and there is no large liquidity problem, we expect that from 2021 to 2023, the company will continue to optimize the regulatory indicators of the "three red lines". Improve turnover and operating efficiency, profitability continues to improve, home net profit is 8.114 billion, 8.921 billion and 9.729 billion respectively. EPS is 2.12yuan / share, 2.33yuan / share, 2.55yuan / share respectively. We believe that the company's performance growth will be steady and good, and we give the company 2.2 times PE in 2021, covering the "cautious recommendation" rating for the first time.
Risk Tips:
The sales removal rate is not up to expectations, profit margins are down, regulation and control policies are tightened more than expected, financing costs are significantly upward, and the equity ratio of new projects is reduced.