\u3000\u3000 Poly Developments And Holdings Group Co.Ltd(600048) (600048)
Core highlights of the company
The leaders of central enterprises have the strategic determination to cross the cycle. In 2006, the initial sales scale of the company was only 8.4 billion yuan, reaching 502.8 billion yuan in 20 years, realizing a leapfrog growth of 60 times in 14 years and a compound annual growth rate of 34%; The market share has increased from 0.4% to 2.9%, and the scale is always in the top five of the industry and the first of central enterprises. We believe that the company's ability to cross the cycle is mainly due to its clear strategic direction and strong execution. Strategically, since its establishment, the company has always been in line with the national development direction and grasped the development opportunities brought by urbanization expansion. On the one hand, we should firmly focus on rigid demand and improved housing to meet housing demand; On the other hand, it has always adhered to residential real estate, the core first and second tier cities, and the diversification of real estate. It has not carried out blind strategic transformation and maintained a solid industry position. Different from the traditional central state-owned enterprises, the company is the leader in promoting the market-oriented mechanism, and the equity incentive and follow-up investment mechanism are sufficient; After taking office, the new management actively increased its holdings, reflecting its determination to continuously promote the development of the company.
Adhere to the main business of real estate and the deep cultivation strategy of "central city + Urban Agglomeration". The company achieved sales of 534.9 billion yuan in 21 years, a year-on-year increase of + 6.4%, and the sales ranking jumped to the fourth place. Due to the company's deep cultivation in the first and second tier core cities, the average sales price is relatively high, with a year-on-year increase of 8.8% of 16049 yuan / ping in 21 years. The sales contribution of 21h1 in the first and second tier cities is 67.6%, with more than 26 billion in Guangzhou, 20 billion in Foshan and 10 billion in Shanghai, Beijing and Dongguan. The advantages of strategic focus are prominent, and the deep cultivation effect of core areas and cities is remarkable. The company is good at flexibly adjusting the rhythm according to the changes of the land market, reasonably grasping the investment rhythm and supplementing high-quality land resources. At the same time, it always controls the land acquisition cost at a reasonable level, and the average floor price / average sales price is always controlled below 50%, so as to ensure sufficient profit space. As of June 21, the area under construction is 140 million square meters, and the area to be developed is 73.23 million square meters, which can meet the development needs of 2-3 years. Among them, the first and second tier cities account for 61% and the four core urban agglomerations account for 37%.
The strategy of "one master and two wings" is clear, and the business of the two wings continues to develop, so as to jointly build a real estate ecological platform. As of the end of June 21, 1) real estate finance wing: the company has three real estate fund management institutions: SINOSURE Fund (holding 40%), poly capital (holding 45%) and Taiping poly (holding 49%), with a cumulative management fund scale of more than 160 billion. 2) Comprehensive service wing: the company effectively integrates industry ecosystem resources, among which poly property (holding 72.3%) has a management area of 428 million square meters, accounting for 1.6% of the market, 38% is the property provided by the parent company of real estate enterprises, the revenue has increased from 2.56 billion in 16 years to 8.04 billion in 20 years, CAGR 33%, and is expected to exceed 10 billion in 21 years; Poly commerce has opened 29 shopping centers in 14 central cities, with an opening area of 1.93 million square meters, and the rental rate of in-service projects exceeds 80%, creating the commercial brands of "time series" and "together series"; Poly hotel has 4 independent brands, 20 hotels have been opened and 4873 guest rooms; Poly apartment has been available for 18 years. In order to meet the living needs of different customer groups and form a differentiated brand matrix, there are two brand systems: n + and yujingge. At present, there are 40 projects in operation and a total of 6120 rooms have been opened. The company has integrated more than 2.3 billion equity brokerage companies in the industry, and completed more than 2.3 billion equity sales agency projects in more than 2.3 billion cities.
Financial indicators: the revenue performance has increased steadily, and the profitability and solvency are in the leading position in the industry. The company's revenue performance increased steadily; Under the pressure of declining profit margin in the industry, the gross profit margin and net profit margin of the company's development business increased steadily as a whole, ranking first among the top 30 real estate enterprises with a gross profit margin of 32.5% in 2021h1. At the same time, it has maintained a moderate leverage level for many years. It is the only green enterprise among the top 5 real estate enterprises in 20 years. As of 21q3, it still maintains the green advantage, has multiple financing channels and low interest financing advantages of central enterprises, and the financing cost is only 4.7%. As of September 21, the monetary capital was 132.1 billion, with a year-on-year increase of 7.7%. The growth rate was 3PCT higher than that in 20 years. Thanks to the company's improvement in the refinement of sales collection management, the return rate remained stable and increased in 17-20 years under the background of capital tightening. In 2021h1, the sales return was 255.6 billion, with a year-on-year increase of 26.3%.
Investment advice and profit forecast
On the basis of the current "virtuous circle and healthy development", high-quality real estate enterprises have taken the lead in obtaining the support of regulators in financing. The company has maintained a moderate leverage level for many years. It is the only enterprise among the top 5 real estate enterprises to achieve the "three red lines" green level in 2020. By the end of the third quarter of 2021, it still maintained the advantage of green level, The revenue performance and sales scale increased steadily. Under the pressure of declining profit margin in the whole industry, the profitability remained at a high level in the industry. At the same time, it will actively participate in the centralized soil auction in 2021, and most of the new projects are concentrated in the high-energy core areas; Sufficient land reserves in hand to support future sales growth. We believe that with the powerful resource moat, the financing advantages of central enterprises, the benefit improvement brought by the upgrading of incentive mechanism and other factors, the company's scale growth will be gradually accelerated to help realize the vision of returning to the top three. In the medium and long term, with the risk mitigation, the industry consolidation will further promote the gathering of various funds, land and other resources to high-quality real estate enterprises. As a high-quality leading real estate enterprise with smooth financing channels and outstanding comprehensive ability, the company will enjoy a higher valuation premium. We estimate that the operating revenue of the company from 2021 to 2023 will be 2851 / 3299 / 379 billion yuan respectively; The net profit attributable to the parent company is 276 / 285 / 29.5 billion yuan respectively; The corresponding EPS is 2.30/2.38/2.46 yuan respectively. The PE corresponding to the current stock price is 6.9x / 6.7x / 6.5x respectively. First coverage, give buy rating.
Main risks of rating
Sales and settlement are not as expected; Real estate regulation tightened more than expected; Financing continued to tighten; Diversified business development is less than expected.
