\u3000\u3000 China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) (001979)
Matters:
The company announced the performance express in 2021, and achieved a revenue of 160.6 billion yuan, a year-on-year increase of 23.9%, and a net profit attributable to the parent company of 10.37 billion yuan, a year-on-year decrease of 15.4%.
Ping An View:
The gross profit margin decreased, superimposed with impairment provision, and the performance decreased year-on-year. The company expects that the net profit attributable to the parent company will decrease by 15.4% year-on-year in 2021, mainly due to: 1) the settlement gross profit margin will continue to decline, and the operating profit will account for 14% of the revenue in 2021, a decrease of 5pct compared with 2020; 2) Based on the principle of prudence, the provision for impairment was 4.37 billion yuan, reducing the net profit attributable to the parent company by 3.46 billion yuan; 3) The equity ratio of settlement projects decreased, and the net profit attributable to the parent company accounted for 45% of the total profit in 2021, down 6pct from 2020; 4) The investment income from the transfer of subsidiaries decreased by 2.45 billion yuan year-on-year.
Outstanding sales performance and relatively positive investment. In 2021, the company achieved a sales area of 14.645 million square meters, with a year-on-year increase of 17.8%. The sales amount was 326.83 billion yuan, with a year-on-year increase of 17.7%. The growth rate of sales amount and area was significantly better than that of the whole country (4.8% and 1.9%). In terms of land acquisition, the company acquired land in 2021 with an amount of 214.99 billion yuan and an area of 15.506 million square meters. The ratio of land acquisition sales amount and land acquisition sales area were 66% and 106% respectively. The investment intensity was significantly higher than that of other mainstream real estate enterprises. At the same time, it focused on key cities. The annual average floor price was 13865 yuan / square, an increase of 50% year-on-year. Sufficient land storage laid the foundation for subsequent sales. In January 2022, the company successfully issued 1.29 billion yuan in the first phase of M & A to replace the initial investment of Shekou acquisition project in August 2021. Under the background of high capital pressure in the current industry, subsequent companies are expected to obtain high-quality M & A projects by virtue of the financial stability of central enterprises.
Investment suggestion: considering the possible slowdown in sales, pressure on profit margin and impairment provision caused by short-term industrial pain, we lowered the company’s profit forecast. It is estimated that the EPS from 2021 to 2023 will be 1.31 yuan, 1.32 yuan and 1.39 yuan (formerly 2.15 yuan, 2.46 yuan and 2.76 yuan), and the current share price corresponding to PE will be 10.6 times, 10.5 times and 10.0 times respectively. The short-term industry policy side continues to improve, which is expected to bring about the repair of sector valuation; In the medium and long term, as the leader of central enterprises, the company has stable finance, prominent financing advantages and active land acquisition and investment, which is expected to drive the gradual recovery of performance. We are optimistic about the medium and long-term performance of the company and maintain the “recommended” rating.
Risk tips: 1) if the pressure of de commercialization in the real estate market continues, resulting in the exchange of sales price for volume, the company’s settlement gross profit margin will further decline, and there will be an impairment risk of high price in the early stage; 2) If the policy care is less than expected, it will have a negative impact on the scale development of the company, resulting in lower performance than expected; 3) There is uncertainty risk in the construction and development progress of the company’s industrial new town.
