22Q3 performance narrowed year-on-year decline, maintaining "overweight" rating
The company released three quarterly reports on October 24, 1-3Q2022 achieved revenue of 305.8 billion yuan, year-on-year-28%; return to the mother net profit of 6.9 billion yuan,-38% year-on-year. In the face of the adjustment of the real estate industry, the company continues to maintain overall stability and large performance, and shareholders of state-owned enterprises also provide liquidity support at critical moments. We maintain our profit forecast and estimate 22-24 EPS to 0.50 pounds 0.57 pounds 0.64 yuan. The average PE of the comparable company in 22 years is 8.4x (Wind consensus expectation). Considering the negative impact of liquidity pressure on the company's operation, we think that the company's reasonable 2022PE is 6.5x, and the target price is lowered to 3.25x (the previous value is 3.75RMB, based on 7.5x 2022PE) to maintain the "overweight" rating.
The year-on-year decline of 22Q3's homing net profit was narrower than that of 22H1, and the real estate business made every effort to promote "guaranteed delivery".
22Q3's revenue is-30% compared with the same period last year, and its net profit is-6% from the same period last year. The year-on-year decline in net profit is narrower than that of 22H1. Taking into account the quarterly losses caused by 21Q4's higher impairment, full-year net profit performance for 2022 is expected to continue to improve year-on-year, but also depends on 22Q4 delivery and impairment.
In terms of real estate business, the company strives to promote "guaranteed delivery". The completed / delivered area of Q3 is year-on-year with revenue of-25% to 112.3 billion yuan, compared with the same period last year. In terms of infrastructure business, the amount of new contracts for 1-3Q was-34% to 362.8 billion yuan compared with the same period last year, and revenue was-24% to 160 billion yuan from the same period last year, of which the amount of new contracts signed from July to September increased month by month.
To strengthen the elimination and repayment of bulk and stock property sales, there is no new 22Q3 company to continue to promote the retail sale of housing and the elimination of bulk properties, stock properties and overseas properties. The sales area is-46% to 2.81 million square meters compared with the same period last year, and the sales amount is-53% to 30.8 billion yuan compared with the same period last year, which is better than 22H1. The sales amount of 1-3Q company is-57% to 98.9 billion yuan compared with the same period last year, and the sales rebate is 109.5 billion yuan, with a payback rate of 111%. Subject to deleveraging and cash flow pressure, 1-3Q did not add new land.
22Q3 successfully repaid a number of debts, and shareholders of state-owned enterprises provided liquidity support. Due to paying close attention to money recovery, suspending land acquisition, and reducing costs and efficiency, 1-3Q Company achieved a net cash flow of 20 billion yuan in operating activities and further reduced interest-bearing liabilities by 20.3 billion yuan to 220.3 billion yuan. Q3 company borrowed a total of 4.45 billion yuan from the shareholders of the two major state-owned enterprises, Shanghai Real Estate and Shanghai City Investment (both unlisted), with an interest rate of 6%, and successfully repaid US $550 million in foreign debt and 2 billion yuan in domestic debt. The liquidity support of the state-owned enterprise shareholders at the critical moment reflects the company's certain advantages in financing. The company still has 870 million US dollars of foreign debt due from November to December, so we need to pay attention to the company's debt repayment.
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