22H1 performance declines year-on-year, maintaining "overweight" rating
The company released its semi-annual report on August 22. 22H1 achieved revenue of 204.6 billion yuan,-28% year-on-year, and return to its mother net profit of 4.2 billion yuan,-49% year-on-year, basically in line with the performance of KuaiBao. Affected by multiple factors, the company encountered temporary operational difficulties, but still maintained overall stability and a large volume of performance, and shareholders of state-owned enterprises also provided liquidity support at critical moments. We maintain our profit forecast, but as the increase brings about an increase in equity, we adjust the 22-24 EPS to $0.57 (previous $0.55) to $0.57 (0.70). The average PE of the comparable company in the past 22 years is 9.1 times (Wind consensus expectation). Considering the liquidity pressure faced by the company, we believe that the reasonable 2022PE is 7.5 times, and the target price is lowered to 3.75 yuan (the previous value is 5.06 yuan, based on 9.2 times 2022PE) to maintain the "overweight" rating.
Operating difficulties temporarily, but still maintain the overall stability of the enterprise and large performance volume 22H1 affected by the real estate downturn, cash flow pressure and Shanghai epidemic situation control, the company faces greater difficulties, but still maintain the overall stability of the enterprise and a large volume of performance. In terms of real estate business, the company strives to promote "guaranteed delivery". The completed area is-17% to 8.6 million square meters compared with the same period last year, and real estate revenue is-22% to 75.5 billion yuan. In terms of infrastructure business, the amount of new contracts is-36% to 246 billion yuan, and infrastructure revenue is-31% to 109 billion yuan. The year-on-year decline in homing net profit is greater than revenue, mainly due to: 1, the base impact of events such as the disposal of long-term equity income in the same period last year and the fair value change income brought about by the listing of war investment enterprises; 2, the profit and loss ratio of minority shareholders + 8.3pct to 33.4% compared with the same period last year.
We will strengthen the elimination and repayment of bulk and stock property sales, and no new land acquisition will be affected by the weak real estate market, especially the decline in third-and fourth-tier cities. 22H1's sales amount is-58% to 68.1 billion yuan compared with the same period last year, and the sales area is-50% to 6.51 million square meters. The company increased efforts to eliminate bulk properties and stock properties, accounting for 55% of residential sales in 2021-22pct; at the same time, pay close attention to cash withdrawal to achieve sales rebate of 77.7 billion yuan, a payback rate of 114%. Subject to deleveraging and cash flow pressure, the company did not add new land in the first half of the year. As of 22H1, the unstarted soil storage surface is 30 million square meters, and the construction surface is 143 million square meters, and the soil storage is still abundant.
Further reducing interest-bearing liabilities, shareholders of state-owned enterprises provide liquidity support due to paying close attention to money recovery and suspending land acquisition, 22H1 achieved net cash flow of 13.1 billion yuan in operating activities and further reduced interest-bearing liabilities by 17.8 billion yuan. After the extension of a US dollar bond due on June 25, the company borrowed 1.5 billion yuan from Shanghai Real Estate and Shanghai City Investment (both unlisted), the shareholders of the two major state-owned enterprises, on August 8 at an interest rate of 6% to help the company successfully repay the US dollar debt due on August 10. The liquidity support of the state-owned enterprise shareholders at the critical moment reflects the company's certain advantages in financing.
Risk tips: epidemic situation, capital chain, real estate policy, downside risk of real estate market.