\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 668 China State Construction Engineering Corporation Limited(601668) )
Event: China State Construction Engineering Corporation Limited(601668) announced that the total amount of newly signed contracts from January to February 2022 was 477.1 billion yuan, a year-on-year increase of + 1.50%. In February, the growth rate of newly signed contracts of the company was – 13.49%, and the year-on-year growth rate of single month orders of construction business and real estate business was – 9.82% and – 40.16% respectively.
Comments:
The growth rate of orders in a single month may be disturbed by the high base, and the completed area of houses nearly doubled year-on-year: in February 2022, the newly signed contract amount of the company’s construction business was 163.4 billion yuan, a year-on-year increase of – 9.82%. By business, the newly signed contract amount of infrastructure business was 40.9 billion yuan, a year-on-year increase of – 26.96%; The newly signed contract amount of housing construction business was 121.8 billion yuan, a year-on-year increase of – 2.17%. The monthly orders of infrastructure and housing construction business increased negatively year-on-year or were disturbed by the high base in the same period of last year. In February 2022, the newly started area of the company’s houses was + 2.57% year-on-year, and the completed area of houses was + 90.54% year-on-year; The year-on-year increase in the completed area of houses or the verification that the completion peak of the real estate industry is accelerating.
The real estate industry policy continues to relax and is optimistic about the strength of CNOOC real estate in 22 years: as of February 2022, the company’s real estate business has accumulated contract sales of RMB 31.3 billion, a year-on-year increase of – 40.3%, or mainly affected by the downturn of the real estate industry. Since this year, the margin of real estate policy has been continuously relaxed, and the down payment ratio of the first house loan has been adjusted more underground. The development civilization of the CBRC and the people’s Bank of China has confirmed the credit support for “300 million new citizens” housing loans, and the real estate chain may usher in a fundamental recovery. If the real estate sales data is observed to pick up later, the inflection point of the fundamentals of the real estate industry can be established. In February 2022, the newly purchased land reserve area of the company is 300000 square meters, or affected by the time point of centralized land supply; The company has abundant soil reserves in hand. By the end of February, the company has a land reserve of 100.97 million square meters, corresponding to a 21-year sales area (21.43 million square meters), and the static decontamination cycle is about 5 years.
The real estate business of the company has long adhered to the steady business strategy, and its subsidiary CNOOC real estate has excellent financial indicators and has the financing advantages of central enterprises. In the real estate downward cycle of 21h2, the impact on the company’s real estate business is small; With the marginal improvement of real estate financing and the optimization of land auction pattern (some private enterprises withdraw passively), the competitive advantage of the company’s real estate business may be further strengthened. It is judged that CNOOC real estate and CSCEC real estate under the follow-up company have achieved counter trend expansion by means of project asset acquisition or purchase of high-quality land resources with their healthy financial statements, smooth financing channels and relatively low financing costs.
Profit forecast, valuation and rating: we are optimistic about the company’s competitiveness in housing construction, infrastructure and other fields, and that the company can still achieve stable growth through the improvement of market share under the background of weak overall market demand. In the past 22 years, the company may benefit from the steady growth policy and the improvement of the concentration of leaders in the real estate industry. Maintain the company’s EPS forecast of 1.20 yuan, 1.29 yuan and 1.41 yuan from 2021 to 2023 respectively. The current price corresponds to the company’s 22-year dynamic P / E ratio of 4.1x, maintaining the “buy” rating.
Risk tip: there is a risk of declining demand for housing construction, a risk of declining growth rate of infrastructure investment, and a risk of too high land acquisition price in real estate business.
