Main points of investment:
Affected by the epidemic, income increased slightly and profits declined in 2020, which was lower than expected. In 2020, the company's revenue was 21.71 billion yuan, + 1% compared with the same period last year; net profit returned to the mother was 1.55 billion yuan,-36% year-on-year; and basic earnings per share was 0.41 yuan,-37% year-on-year. The lower-than-expected performance is mainly due to the impact of the epidemic, the decline of rental income and the lag of settlement progress. Real estate settlement income of 20.24 billion yuan, + 1% year on year.
The rental management fee income is 1.15 billion yuan,-1% compared with the same period last year; the company's gross profit margin and homing net profit rate are 35.4% and 7.1% respectively, which are + 0.3pct and-4.2 pct respectively; and the company's three fee rates are 9.6% and + 1.4 pct year-on-year, in which the sales, management and financial rates are + 1.6pct, + 0.1pct and-0.3pct respectively compared with the same period last year.
The sales target for the whole year was successfully achieved, and the planned sales for 21 years grew by 40% year on year. In 2020, the company achieved a total of 27.2 billion yuan in contracted sales, an increase of 11% over the same period last year, and achieved 101% of the annual contracted sales target. The contracted sales area dropped slightly to 108 million square meters, but the average sales price reached 25200 per square meter, an increase of 27 percent over the same period last year; the company's newly opened area was about 2.89 million square meters, an increase of 13 percent over the same period last year; and the completed area was about 99 million square meters, an increase of 2 percent over the same period last year. By the end of 2020, the company has an area of about 1034 million square meters under construction. The company plans to achieve contract sales of 38 billion yuan in 21 years, corresponding to a year-on-year increase of 40%.
The amount of land / sales reaches 54%, and most of the new projects are located in high-level cities. In 2020, the company acquired a total of 11 projects, with an additional capacity area of 2.77 million square meters, of which the total amount of land sold by bidding and auction was 13 billion yuan, the amount of rights and interests was 7.3 billion yuan, and the amount paid by mergers and acquisitions was 1.6 billion yuan. The area of equity transfer projects in the new land reserves accounted for more than 30%. The total land price of the company is 14.7 billion yuan, and the proportion of equity is about 50%. The amount of land / sales amount is 54%, the area of land / sales area is 256%, and the intensity of land acquisition is higher. In addition, the cost of land acquisition is well controlled, with an average floor price of 5307 yuan, a land / sales price ratio of 21%, and 65% of second-tier and above cities in new land reserves.
After the epidemic, the rental rate gradually recovered, and the revenue from rental and management fees is planned to increase by 30% in 21 years. At the end of December 2020, the company leased real estate with a floor area of about 1.7 million square meters, a leasable area of about 960000 square meters, and a leased area of about 780000 square meters, with a comprehensive rental rate of about 82 percent. The company's composite occupancy rate is only slightly lower than at the end of 2019 by about 4 percentage points. Flat realized rent + property management fee income of about 1.149 billion yuan for the whole year,-1% compared with the same period last year. After adding back the rent-free amount of 100 million yuan, the corresponding growth rate was 7.8%. The company's 21-year planned rent + property management fee income reached 1.49 billion yuan, an increase of 30% over the same period last year.
The cash flow is abundant, the leverage ratio is still low, and the three red line indicators remain green. The company's asset-liability ratio excluding advance receipts is 63.2%, up 4.73 pct from the end of 2019; the net debt ratio is 20%, down 2 pct from the end of 2019, and the leverage ratio is relatively robust. At present, the company holds 14.4 billion yuan in cash and 3.1 in monetary funds / short-term debt, so the risk of short-term debt repayment is low. According to the company's current projects, the company's capital expenditure is expected to be 27 billion yuan, and the three expenses are expected to be 4.2 billion yuan. It plans to use bank loans, debt financing, pre-sale loans, entrusted loans and other financing means to meet the capital needs.
Investment advice: maintain the "buy" rating and downgrade the profit forecast. The company implements the group integrated two-wing strategy, with nearly 200 billion goods value of high-quality residential + commercial land reserve, the first and second line accounts for 85%. With high quality assets and positive changes in management thinking, the management put forward the vision of a compound sales growth rate of more than 2021 in the next five years, but taking into account the time lag of the carry-over, the forecast for 2021-23 was revised downgrade. the net profit in 2021-23 is expected to be attributed to the parent company of RMB 1.95 billion (the net profit originally estimated to be attributed to the parent company in 2020-22 is RMB 2.744 billion) The year-on-year growth rate was 25.9%, 18.4%, 16.7%. The corresponding EPS is 0.52, 0.62 and 0.72 yuan, respectively. The PE corresponding to the current price is 8.8x, 7.3x, 6.3x.
Risk hint: sales fell short of expectations and rents fell sharply.