\u3000\u3 China Vanke Co.Ltd(000002) 244 Hangzhou Binjiang Real Estate Group Co.Ltd(002244) )
Long term focus on Zhejiang and Hangzhou, with excellent performance Hangzhou Binjiang Real Estate Group Co.Ltd(002244) has always shown itself as a high-quality regional private real estate enterprise, focusing on Zhejiang Province and Hangzhou for a long time. The strategy of deep ploughing in this region has brought considerable performance growth to the company. In 2021, the company’s sales volume achieved a contrarian growth under the overall downturn of the industry, reaching 169.1 billion yuan, a year-on-year increase of 24.0%. We believe that the scale and advantages of the company’s soil storage will support the company’s continuous performance growth from 2021 to 2023.
Three advantages help the company accelerate its expansion. The company has the advantages of region, credit and management. First of all, in recent years, the transaction of new houses in Hangzhou market has repeatedly reached new highs, and the contradiction between supply and demand has kept the de conversion rate high, and the local auction market has also ushered in the improvement of profit margin. Considering that the company’s value of goods in Hangzhou accounts for 67%, it is expected to fully benefit in the long term. Secondly, the company is a green housing enterprise with a clear and healthy debt structure and no trust and overseas debt financing. At the same time, it is also one of the first private real estate enterprises to resume refinancing after industry risk exposure. In 2022, the bond issuance interest rate will fall to 3.6% – 4.0%, which is expected to drive the current comprehensive financing cost of 4.9% down further. Since 2021, the company’s organizational structure has been streamlined and the company’s cost control ability has been continuously improved. At the same time, the company’s confidence in the company’s long-term development has been strengthened. Finally, in 2021, the company’s organizational structure has been streamlined and the company’s personnel management and control ability has been strengthened. At present, the company has a strong demand for national development. In 2021, it entered Guangzhou historically, continued to explore Nanjing, and continued to consolidate the strategic layout of “three provinces and one city” (i.e. Zhejiang, Jiangsu, Guangdong and Shanghai). The investment intensity also increased to 57% in 2020 and remained at a high level of 40.1% in 2021. Good credit qualification, product standardization, easy to copy in different places, and there is room for tapping management potential. At present, the company also has sufficient conditions for expansion.
Maintain the buy rating and raise the target price to 8.40 yuan. We predict that the company’s EPS from 2021 to 2023 will be 0.83/1.05/1.30 yuan (the original forecast was 0.97/1.27/1.64 yuan). According to the PE valuation of comparable companies in 2022 is 6x, we give the company a valuation premium of 30%, that is, the valuation level of 8x, corresponding to the target price of 8.40 yuan (the original target price was 6.79 yuan).
Risk warning: the price limit in the Yangtze River Delta exceeds expectations; The expansion speed of the company is lower than expected.
