\u3000\u3 Ping An Bank Co.Ltd(000001) 979 China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) )
Core view
China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) released the performance express for 2021. The annual revenue was 160.6 billion yuan, a year-on-year increase of 23.9%, and the net profit attributable to the parent company was 10.37 billion yuan, a year-on-year decrease of 15.4%.
The decrease of gross profit margin superimposed the provision for impairment, and the performance was lower than the market expectation. The company is expected to achieve a total operating revenue of 160.6 billion yuan in 2021, with a year-on-year increase of 23.9%; The net profit attributable to the parent company was 10.37 billion yuan, a year-on-year decrease of 15.4%. In 2021, the company’s net profit margin was 6.5%, 3 percentage points lower than that in 2020. The year-on-year decline of the company’s performance was mainly due to the continuous decline of the settlement gross profit margin and the centralized delivery and settlement of some high price and low gross profit projects, which affected the overall profit level. At the same time, the company made an asset impairment provision of 4.37 billion yuan in 21 years, which correspondingly reduced the net profit attributable to the parent by 3.456 billion yuan. In addition, the investment income generated by the company’s transfer of subsidiaries decreased by 2.45 billion yuan year-on-year.
Strong sales performance and relatively positive investment. The company’s sales amount in 2021 was 326.8 billion yuan, a year-on-year increase of 17.7%; The sales area was 14.64 million square meters, with a year-on-year increase of 17.8%, corresponding to the average sales price of 22317 yuan / square meter, which was basically the same as last year. In terms of land acquisition, the company added 15.51 million square meters in 2021, a year-on-year decrease of 4.6%, and the total land price was 215 billion yuan, a year-on-year increase of 42%. The sales area ratio and sales amount ratio of land acquisition were 106% and 65.8% respectively, and the investment was relatively positive. The expanded average floor price was 13866 yuan / square meter, a year-on-year increase of 48.8%, reflecting the significant improvement of the energy level of the company’s land acquisition City, which also means that sufficient high-quality soil storage lays the foundation for subsequent sales.
Smooth financing channels and obvious cost advantages. In January 2022, the company successfully issued 1.29 billion yuan in the first phase of M & A. the financing costs of three-year and five-year varieties were only 2.89% and 3.3% respectively, and the financing costs further decreased. Since 2029, the company has successfully raised two short-term notes of RMB 8.51 billion in the fourth quarter and two short-term notes of 2029. Under the background that the financing environment has not been fully liberalized, the company’s financing channels are unblocked and the financing cost remains low. With the financing advantages of central enterprises, it is expected to realize positive and steady expansion in the limited competition environment in the future.
Investment suggestion: the company’s sales growth rate in 2021 remains the industry leader, and it is also a relatively positive enterprise among brand real estate enterprises in terms of land expansion. At the same time, REITs listing is expected to continue to contribute profits. In the era of M & A, the company can obtain more high-quality resources by virtue of the credit background of central enterprises and the advantage of low financing cost. In recent years, the company has further improved the project de capitalization rate and IRR level through the optimization of management mode. With the stabilization of the company’s gross profit margin and the release of the pressure of early impairment, the company’s future performance is expected to achieve steady growth. We predict that the company’s EPS will be 1.31 yuan / 1.31 yuan / 1.42 yuan / share from 2021 to 2023, and the corresponding PE will be 10.6 / 10.6 / 9.7 times respectively, maintaining the “buy” rating.
Risk warning: the marginal improvement of policy is less than expected, the de commercialization of sales is less than expected, the impairment risk of high price in the early stage, etc.
