\u3000\u3000 China State Construction Engineering Corporation Limited(601668) (601668)
Event: China State Construction Engineering Corporation Limited(601668) announced that the newly signed contract amount in January 2022 was 298.8 billion yuan, an increase of 13.1% at the same time. Among them, the newly signed contract amount of construction business was 282.4 billion yuan, an increase of 19.4% at the same time; The contract sales of real estate business reached 16.4 billion yuan, an increase of – 40.3% at the same time.
Comments:
The leading advantages of housing construction business are remarkable, and the steady growth of infrastructure has been verified: in January 2022, the newly signed contract amount of the company’s construction business was 282.4 billion yuan, a year-on-year increase of + 19.4%. By business, the newly signed contract amount of infrastructure business was 48.7 billion yuan, a year-on-year increase of + 68.1%; The newly signed contract amount of housing construction business was 232.7 billion yuan, a year-on-year increase of + 12.6%. In January 2022, the new construction area of the company’s houses was – 58.7% year-on-year; The completed area of the house was – 13.8% year-on-year.
Under the background of relatively weak real estate and infrastructure investment, the company’s real estate construction business still maintained a rapid growth rate, which verified the company’s competitive advantage as a leader in the real estate construction industry. At the same time, the growth of infrastructure orders has accelerated significantly, which verifies that the steady growth force of infrastructure is being fulfilled.
The policy of the real estate industry is relaxed and gradually guided to the demand side. It is optimistic about the strength of CNOOC real estate in 22 years: in January 2022, the company’s real estate business accumulated contract sales of 16.4 billion yuan, a year-on-year increase of – 40.3%, or mainly affected by the downturn of the prosperity of the real estate industry. Since this year, the margin of real estate policy has been continuously relaxed. Under the background of urban policy implementation, the proportion of down payment of first house loan has been adjusted more underground, and the policy side has been gradually guided to the demand side; If the real estate sales data is observed to pick up later, the inflection point of the fundamentals of the real estate industry can be established. In January 2022, the newly purchased land reserve area of the company is 0, or it is affected by the time point of centralized land supply; The company has abundant land reserves. By the end of January, the company has a land reserve of 102.07 million square meters, corresponding to a 21-year sales area (21.43 million square meters), and the static saleable time is 5 years.
The real estate business of the company adheres to the steady business strategy for a long time; Its subsidiary, CNOOC real estate, has excellent financial indicators and has the financing advantages of central enterprises. In the real estate downward cycle of 21h2, the impact on the company’s real estate business is small; With the marginal improvement of real estate financing and the optimization of land auction pattern (some private enterprises withdraw passively), the competitive advantage of the company’s real estate business may be further strengthened. It is judged that CNOOC real estate and CSCEC real estate under the follow-up company have achieved counter trend expansion by means of project asset acquisition or purchase of high-quality land resources with their healthy financial statements, smooth financing channels and relatively low financing costs.
Profit forecast, valuation and rating: we are optimistic about the company’s competitiveness in housing construction, infrastructure and other fields. The company’s newly signed orders maintain a rapid growth rate, which shows that the leader can still achieve stable growth through the improvement of market share under the background of weak overall market demand. In the past 22 years, the company may benefit from the steady growth policy and the improvement of the concentration of leaders in the real estate industry. Maintain the company’s EPS forecast of 1.20 yuan, 1.29 yuan and 1.41 yuan from 2021 to 2023 respectively. The current price corresponds to the company’s 22-year dynamic P / E ratio of 4.2x, maintaining the “buy” rating.
Risk tip: there is a risk of declining demand for housing construction, a risk of declining growth rate of infrastructure investment, and a risk of too high land acquisition price in real estate business.
