Affected by the general environment of the real estate market, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) once again recorded a decline in the annual net profit attributable to the parent company.
On February 23, 2022, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) released a performance express, which said that in 2021, it achieved a total operating revenue of 160.643 billion yuan, an increase of 23.93% year-on-year; The total profit was 22.843 billion yuan, a year-on-year decrease of 5.25%; The net profit attributable to the parent company was 10.372 billion yuan, a year-on-year decrease of 15.35%; The net profit after deducting non attributable assets was 8.859 billion yuan, a year-on-year decrease of 2.46%.
From the analysis of the profit sources of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) in recent years, it can be seen that while the operation remains stable, the factors that have a great impact on the profits in recent years are the provision for asset impairment and the income from asset transfer, which is no exception last year.
In the performance express, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) analyzed the reasons for the decline in profits. According to China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , in 2021, the area of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) real estate projects completed, delivered and carried forward increased, so the carry forward income of real estate business increased. However, affected by the downward market, the carry forward gross profit margin of real estate business decreased year-on-year.
According to the data released by China Merchants Bank Shekou, the net profit margin of parent company in China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) 2021 is about 6.45%, above the average level; However, if compared with other stable real estate enterprises, there is still some room for optimization. For comparison, for Poly Developments And Holdings Group Co.Ltd(600048) and Gemdale Corporation(600383) that recently released the performance forecast, the net profit margin attributable to the parent company in 2021 is about 9.67% and 9.53% respectively.
In addition to the factors of carrying forward the gross profit margin, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) also showed a full cautious attitude in the provision for impairment. As of December 31, 2029, it is said that there are signs of impairment in the reference market.
According to the impairment test results, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) the provision for asset impairment of inventories, investment properties and long-term equity investment and the provision for credit impairment of receivables of major risk categories totaled 4.372 billion yuan, reducing its net profit attributable to the parent company by 3.456 billion yuan in 2021 and increasing its impact on the net profit attributable to the parent company by 1.272 billion yuan year-on-year.
China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) in the past, there were also large impairment provisions. According to the previous announcement, in 2020, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) conducted an impairment test on the assets with signs of impairment as of December 31, 2020. The results showed that in 2020, the provision for impairment such as provision for inventory falling price and provision for credit loss of receivables of major risk categories was 3.101 billion yuan, an increase of 970 million yuan year-on-year; The net profit attributable to the parent company decreased by 2.184 billion yuan, with a year-on-year increase of 750 million yuan.
At the 2020 performance presentation meeting, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) managing director Jiang Tiefeng also mentioned that “2016 and 2017 China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) took a lot of high prices, and most of them entered the carry forward cycle in 2020”. It is this batch of high prices that caused China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) to make a significant provision for impairment in 2020.
In addition, as the main source of performance contribution of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) in recent years, the income from the transfer of subsidiaries in 2021 is also lower than before. China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) pointed out that during the reporting period, the investment income from the transfer of subsidiaries decreased by 2.445 billion yuan year-on-year, and the resulting net profit attributable to the parent decreased by 2.049 billion yuan year-on-year.
This is a performance express that investors regret. In fact, in the first three quarters of last year, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) also produced a quarterly report with good quality. At that time, the market had a downward trend, which was unique.
According to the third quarterly report of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) 2021, its operating revenue in the first three quarters of 2021 was 81.758 billion yuan, a year-on-year increase of 63.13%; The net profit attributable to shareholders of listed companies was 6.351 billion yuan, with a year-on-year increase of 189.76%. This net profit growth rate is not inconspicuous.
However, with the one-time impairment provision in the fourth quarter, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) did not maintain a significant growth trend in the end.
Looking back on the performance of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) in recent years, the performance of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) is not blameless, and its net profit attributable to the parent company has shown a downward trend before that. According to the statistics of the 21st Century Business Herald reporter, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) the net profit attributable to the parent company from 2018 to 2020 was 15.24 billion yuan, 16.033 billion yuan and 12.25 billion yuan respectively, with a year-on-year increase of 20.4%, an increase of 5.2% and a decrease of 23.6% respectively.
From a fundamental point of view, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) is still a comprehensive real estate enterprise with certain advantages in capital and investment.
In the past 2021, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) investment in the open land market is still aggressive. According to public data, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) the total amount of newly acquired land in 2021 was 213.63 billion yuan, and the annual equity land purchase amount was 122.994 billion yuan.
In fact, according to the data obtained by the 21st Century Business Herald reporter, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) in the land acquired in the first half of last year, many of them belong to high price land projects, which also shows China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ‘s pursuit and radicalization in scale.
Driven by this, coupled with objective factors, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) has achieved a leap forward in scale and seating. According to the previous announcement of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , from January to December 2021, it has achieved a total contracted sales area of 14.6447 million square meters, a year-on-year increase of 17.77%; The total contracted sales amount reached 326.834 billion yuan, an increase of 17.73% year-on-year. It moved into the 300 billion camp for the first time and entered the top 7.
In terms of financing, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) also frequently drinks “first taste soup”. On January 12, 2022, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) issued the first M & A notes this year, with an initial issuance amount of 2.58 billion yuan. According to the prospectus, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) the bond raised 1.29 billion yuan to support enterprises with strong synergy in the industry to alleviate liquidity pressure, and 1.29 billion yuan to repay the company’s bank loans.
With the efforts of both sides of investment and financing, the market still generally believes that it will remain competitive after China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) . Citic Securities Company Limited(600030) previously pointed out in a research report that China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) sales fell with the market, but the capital was safe and there was no impact of consumers’ concern about delivery. Therefore, the overall sales decline was less than that of low credit peers.
Citic Securities Company Limited(600030) it is expected that the mortgage and credit will be more abundant in early 2022, and the market sales are expected to pick up in March 2022. After the market stabilizes, once the house price recovers, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) a large number of low gross profit projects have business flexibility, and its central enterprise identity and stable financial structure can ensure that it can smoothly pass the downward cycle of the market.
In terms of stock price performance, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) has not performed well since last year. As of the closing on February 23, 2022, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) was reported at 13.85 yuan / share, down 2.33%, with a total market value of 109.7 billion yuan.
