Shenzhen Tagen Group Co.Ltd(000090) (000090)
matter:
The company announced the performance forecast for 2021. It is expected to realize a net profit attributable to the parent company of RMB 1.78-2.08 billion, a year-on-year increase of 19.8% – 40.0%, and the corresponding EPS is RMB 0.8785/share-1.0391/share, exceeding the market expectation.
Ping An View:
The increase of real estate carry forward and tax liquidation maintained a rapid growth in performance. The company expects the annual net profit attributable to the parent company to increase by 19.8% – 40.0% year-on-year, which is mainly driven by the increase of real estate business carry over income; At the same time, the tax liquidation of relevant real estate projects was completed, resulting in an increase in net profit of about 700 million yuan. In addition, under the background of pressure on the fundamentals of the real estate market, the company accrued inventory impairment for some developed products outside Shenzhen, resulting in a decrease in net profit of about 300 million yuan.
Real estate sales grew well and urban construction services advanced steadily. In the first three quarters, the company achieved a real estate sales area of 66000 square meters Amount: RMB 3.23 billion (Tianjian Tianjiao Beilu contributed 1.8 billion yuan), a year-on-year decrease of 54% and an increase of 17% respectively. At the end of the third quarter, the unsold resources still reached 980000 square meters. In the first three quarters, the company’s urban construction and service sector developed steadily, undertaking 199 projects such as PPP, EPC, agent construction and general contracting, with a contract amount of 37.624 billion yuan, a year-on-year increase of 5.76%; in November, the wholly-owned subsidiary and CCCC The bidding consortium composed of (Shenzhen) Engineering Bureau Co., Ltd. won the bid of “investment + construction general contracting of Shenzhen Huizhou intercity Dapeng branch line project of Shenzhen metropolitan area intercity railway in Guangdong, Hong Kong and Macao Dawan district” The bid winning price of the project is as high as 13.486 billion yuan, of which the contract amount of the wholly-owned subsidiary is 1.869 billion yuan. The company also made great efforts to improve the comprehensive commercial operation capacity and commercial operation efficiency. As of the end of the third quarter, the average rental rate of the project was 95% and the rent collection rate was 96%; At the same time, actively promote the application of Luohu jincui urban renewal project and Longhua Huafu Industrial Zone renewal project.
Investment suggestion: considering that the development of the company’s real estate carry forward and urban construction services is better than expected, the original profit forecast is raised. It is estimated that the EPS from 2021 to 2023 will be 1.03 yuan, 1.16 yuan and 1.28 yuan (formerly 0.92 yuan, 1.01 yuan and 1.11 yuan), and the current share price corresponding to PE is 5.2 times, 4.6 times and 4.2 times respectively. The company proposed to firmly grasp “urban construction and service” in the “14th five year plan” development strategic plan Core functions, based on Shenzhen, serving the bay area and expanding the market value. In the short term, with the promotion and carry over of key projects, the company’s performance is expected to continue to grow. In the medium term, as the resource integration platform of Shenzhen construction engineering group, the future business model is expected to be transformed and upgraded, the incentive system is also continuously improved, and the “recommended” rating is maintained.
Risk tips: 1) at present, the fundamentals of the real estate industry are under pressure. If the demand release of subsequent industries is lower than expected, real estate enterprises generally exchange price for quantity, or bring the risk of asset impairment of the company; 2) If there is no significant improvement in the follow-up real estate capital side policy, the company may face capital pressure risk; 3) In the field of construction, the industry barrier is low, the competition is fierce, the price of raw materials rises, the labor supply is in short supply, and the labor cost rises rapidly, which puts great pressure on enterprises; 4) The planning adjustment and demolition schedule of the company’s urban renewal and reconstruction project are complex and uncontrollable, which may lead to the delay of project development plan or shed reconstruction schedule, increase of relevant costs and other risks.
