China Vanke Co.Ltd(000002) (000002)
The month on month growth rate of sales stabilized in December. In December, the company achieved a contract sales area of 3.5 million square meters and a contract sales amount of 63.6 billion yuan, respectively + 37.7% and + 47.3% month on month, compared with – 45.6% and – 37.4% in December 2021 and – 15.7% and + 10.9% in December 2019. In 2021, the company achieved a total contractual sales area of 38.08 million square meters and a contractual sales amount of 627.8 billion yuan, with a year-on-year increase of – 18.4% and – 10.8% respectively. We believe that due to the high base at the end of 2020, the year-on-year decline of the company’s monthly sales in December is excusable.
The land acquisition equity ratio was improved, the average floor price / average sales price ratio was maintained, and the cost was properly controlled. In 2021, the company added 152 new land acquisition cases and 28.23 million square meters of construction area, a year-on-year increase of – 16.1%, including 21.4 million square meters of equity land acquisition construction area, a year-on-year increase of + 4.0%, and the equity ratio increased to 76%, an increase of 15 PCT compared with 20 years. In 2021, the company’s full caliber land acquisition amount / sales amount was 33%, increased by 1PCT compared with 2020, the full caliber land acquisition construction surface / sales construction surface was 74%, increased by 2pct compared with 2020, and the average floor price / average sales price was 44%, which was the same as that in 2020. The company’s land acquisition in 2021 is mainly concentrated in hot second tier cities such as Nanjing, Chengdu, Xi’an and Wuhan.
The financial operation is stable and keeps the advantage of financing cost. As of 2021q3, the net debt ratio of the company was 31.9%, the cash short debt ratio was 1.79, the asset liability ratio excluding advance receipts was 70.5%, down 0.7pct compared with the medium term, the debt structure was improved, and the overall operation was stable. The advantage of financing cost is obvious, the international rating remains stable, and the issuance interest rate during the year is 2.99-3.98%. It is expected to continue to benefit from the correction of financing policies in the future.
Multi business supports medium and long-term logic. The company laid out diversified businesses earlier, focusing on sub tracks of property management, leasing, commerce and logistics, with the scale ranking in the forefront of the industry. 1) Property management: by 2021h1, all things cloud had achieved a revenue of 10.4 billion yuan, a year-on-year increase of + 33.3%. By the end of 2020, it had a management area of 566 million square meters, basically forming a business model focusing on housing, commerce, value-added services and urban services. The company announced the spin off and listing plan in November 21 to accelerate business transformation and tap the stock market space. 2) “Boyu” long-term rental apartments: as of 2021h1, Boyu has achieved a revenue of 1.3 billion yuan, a year-on-year increase of + 25.6%. It has managed 192000 houses and opened 148000 houses in total, with a rental rate of 95%, ranking first in the industry. 3) Business: as of 2021h1, the business has opened a total of 9.89 million square meters, a year-on-year increase of + 18.3%, and the overall rental rate is 92.3%. The project reserves are rich, with 5.49 million square meters planned and under construction, realizing a revenue of 3.6 billion yuan, a year-on-year increase of + 19.0%, of which India’s revenue contribution accounts for about 68%. 4) Logistics: as of 2021h1, wanwei has managed a total leasable area of 11.49 million square meters, opened a total of 7.97 million square meters, the rental rate in the stable period is about 93%, and achieved a revenue of 1.3 billion yuan, a year-on-year increase of + 64%. 5) Hotel: in 2020, after integrating the former ice and snow business department, the company established the hotel and resort business department to operate 23 hotel assets and 3 ski resort projects held by the company. We believe that the orderly promotion of the company’s diversified business has verified the company’s comprehensive development ability and operation strength, and the company has strong medium and long-term development competitiveness in the process of industry pattern optimization.
Investment suggestion: we believe that the company operates steadily and has obvious advantages in financing cost. It will effectively supplement high-quality soil storage in 2021 to lay the foundation for subsequent sales. In addition, the company’s diversified business continues to promote, its comprehensive strength is strong, and it has strong competitive strength in the process of industry pattern optimization. We predict that the company’s EPS in 2021 and 2022 will be 3.48 yuan and 3.65 yuan per share. With reference to the valuation of comparable companies, we will give a PE valuation of 7.5 times in 2022, with a corresponding target price of 27.4 yuan and a corresponding market value of 266.3 billion yuan. We will give a buy rating.
Risk tip: the short-term profit of development business is down, and the profit growth rate is lower than expected
