Performance declined in 2021. In 2021, the company achieved an operating income of 102.6 billion yuan, an increase of 25% over the same period last year, and a net profit of 3.8 billion yuan, an increase of-70% over the same period last year. The main reasons why the revenue growth rate is higher than the return net profit growth rate are as follows: 1) the profitability of real estate and tourism business has declined due to the regulation and control of the real estate industry, the carry-over structure and the epidemic situation. In 2021, the gross profit margin of the real estate business was 21%, down 38 pct from the same period last year; and the gross profit margin of the integrated tourism business was 32%, lower 10pct than the same period last year. 2) the investment income decreased by 2.8 billion yuan compared with the same period last year. The investment income in 2021 is 600 million, compared with 3.4 billion in the same period last year. 3) the impairment loss of assets is 2.1 billion yuan, 150% more than the same period last year.
The controlling shareholder replaced the chairman, and the former general manager of Poly took over as chairman of Oct Group. On March 30, Duan Xiannian, chairman and party committee secretary of overseas Chinese Town Group, officially retired, and Zhang Zhengao, former general manager of Poly Group, took over as the new chairman of the group.
Sales have declined, but the real estate business has benefited from supply-side reforms, active access to land and lower costs. 1) sales have declined with the industry. In 2021, the company signed a total sales area of 3.99 million square meters,-14% compared with the same period last year, and contracted sales of 82.5 billion yuan,-22% compared with the same period last year. 2) take the land more actively. In 2021, the company acquired 23 new projects, with an additional construction area of 4.35 million square meters, with a total land price of 30.3 billion yuan and a land acquisition strength of 37%. By the end of 2021, the company can develop 2251 million square meters of land. 3) the cost of acquiring land is low, and the culture and tourism has an advantage. 65% of the company's projects are obtained at or near the rock bottom price. The cost of land acquisition by the company is relatively low. In 2021, the company's cultural and tourism integrated + entertainment land accounted for 21%, and the average land price was only 3696 yuan per square meter (9263 yuan per square meter for commercial housing). The overall average land price accounted for 34 percent of the average sales price.
The business of literature and travel has recovered somewhat. In 2021, the company's 27 scenic spots, 28 hotels, 1 travel agency, 7 open tourism areas and 1 tourism performing arts received a total of 77.979 million tourists, excluding the newly added projects in 2021, the level was 117% in 2020 and returned to 96% in 2019.
The three red lines continue to meet the standards, and the financing advantages of central enterprises are significant. By the end of 2021, it was estimated that the asset-liability ratio of the company excluding accounts received in advance was 68.8%, the net debt ratio was 60.1%, and the cash-to-short debt ratio was 2.4. As a central enterprise financing channel, the company has a smooth financing channel and a relatively low cost. Multi-channel financing for the whole year is 58.625 billion yuan, with an average financing cost of 4.46%, which continues to decline compared with 4.48% in the same period last year.
Investment suggestion: under the background of industry supply-side reform, the advantages of central enterprises are obvious, the three red lines continue to meet the standards, and the financing advantages are significant. "literature and tourism + real estate" may be one of the new development directions in the future. Be optimistic about the investment value of the company in the medium and long term. We forecast that the company's EPS for 22-23 will be 0.55 yuan and 0.64 yuan respectively, with a "prudent overweight" rating corresponding to 13.3 times and 11.5 times valuation as of March 31.
Risk tips: real estate sales are lower than expected, the epidemic situation is uncertain, and the regulation of real estate policy is higher than expected.