\u3000\u3000 Hangzhou Binjiang Real Estate Group Co.Ltd(002244) (002244)
The company has focused on the real estate industry for 29 years, and the sales scale has expanded against the trend. As an old Zhejiang real estate enterprise, the company has focused on the real estate industry for more than 20 years and accelerated its expansion in recent years. From 2015 to 2019, the company achieved a leap in sales from 20 billion yuan to 100 billion yuan. In 2021, the company’s performance was still bright, with sales of 169.1 billion yuan, a year-on-year increase of 24%, which was much higher than the average growth rate of – 1.9% of the top 40 real estate enterprises, ranking fourth, and the top 100 of Kerry rose to 22nd.
The strategy focuses on Hangzhou and deep cultivation in Zhejiang, with excellent soil storage quality. The company’s main real estate business accounts for more than 90% of its operating revenue. Strategically, it focuses on Hangzhou and Zhejiang, and layout high-energy cities outside the province, gradually forming the layout of “three provinces and one city” (Zhejiang Province, Jiangsu Province, Guangdong Province and Shanghai). As of 2021h1, the sales value of the company’s soil storage is 278 billion yuan, which can cover 1.6 times of the sales in 2021. Among them, the value of goods in Hangzhou accounts for 67%, non Hangzhou cities in Zhejiang Province account for 16%, and non Hangzhou cities outside Zhejiang Province account for 17%. The quality of land reserves is high, and the de commercialization of sales is expected to be good. In addition, the company ranked first in sales in Hangzhou for two consecutive years, accounting for more than 10% of the market in 2021, and the strategic effect of deep cultivation in the base camp is obvious. The third batch of local auction policy adjustment in Hangzhou in 2021 opened the profit margin of the project. The company continued to make up its position and the gross profit margin of land acquisition rebounded.
The financing structure is healthy, and the financing cost is comparable to that of state-owned enterprises. As of 2021h1, the net debt ratio of the company was 91.2%, the debt ratio excluding advance was 69.1%, the cash short debt ratio was 1.62, and the three red lines maintained the green level in recent three years. The debt structure is reasonable. As of 2021h1, bank loans account for 72.8%, there are no trust and overseas bonds, and interest bearing liabilities due within one year account for only 24.1%; The financing cost of 2021h1 company is 4.9%, which is comparable to the leader of state-owned enterprises, and has been declining steadily in recent five years. Under the background of frequent credit risks in the industry, the company is more favored by financial institutions.
Strong product strength and brand strength, fast project decontamination and high premium. (1) The company’s products have been rapidly removed. The average winning rate of 31 opening projects in Hangzhou in 2021 was 9.1%, which was lower than the average winning rate of Hangzhou new house market in that month; (2) The product system is mature, highly standardized and reproducible, which is conducive to strengthening the control of quality and time in all key links; (3) Compared with competitive products, it can achieve a higher premium, so it is more favored by customers in the new housing market. Some buildings we track have an average premium of 23% compared with surrounding competitive products.
Efficient internal management and stable external cooperation. Internally, through standardized management, improve human efficiency (in 2020, the average number of people for each project will be 10, and the per capita sales will reach 129 million yuan / person), and accelerate turnover (the first opening of land acquisition projects in Hangzhou within 7.5 months and foreign projects within 6 months). Maintain long-term strategic cooperation with excellent suppliers to ensure the stability of project quality and product quality. There are 9 general contracting units of the company, and the cooperation period of 5 is more than 10 years, and the longest is more than 25 years. In the middle of 2021, the sales management rates of the company’s revenue and trading sales were only 3.3% and 1.4% respectively, ranking at the lowest level of the sample real estate enterprises.
Investment rating: give a “buy” rating. As of the third quarter of 2021, the company’s advances received plus contract liabilities totaled 90.7 billion yuan, which can cover 3.3 times the real estate settlement income in 2020 and provide guarantee for the future settlement income. It is estimated that the company’s revenue in the year of 21 / 22 / 23 will be 32.96/428.9/54.52 billion yuan; The net profit attributable to the parent company is RMB 2.68/33.6/4.1 billion; The corresponding EPS is 0.86/1.08/1.32 yuan respectively; The corresponding PE is 6.9 / 5.5 / 4.5 respectively. NAV is estimated to be 38.58 billion yuan, and the current share price is discounted by 52.3%. We give the company a target market value of 29.71 billion yuan, corresponding to pe8.8 billion yuan in 2022 85 times, 23% lower than NAV. For the first time, give a “buy” rating.
Risk tip: the expansion and deep cultivation of new areas are not as expected; Land acquisition and sales growth were lower than expected; The improvement of gross profit margin is less than expected; Policy regulation exceeded expectations.
