\u3000\u3 Ping An Bank Co.Ltd(000001) 979 China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) )
Event: on March 21, 2022, the company released its annual report for 2021
In 2021, the company achieved an operating revenue of 160.64 billion yuan, 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%; The basic earnings per share was 1.16 yuan, a year-on-year decrease of 20.6%.
Comments: the release of revenue is accelerated, and the gross profit margin is still under pressure; The sales performance is bright, and the energy level of land investment city is improved; Holding business in parallel with real estate development
1) the accelerated release of revenue, the decline of gross profit margin and the prudent provision for asset impairment put pressure on profits. In the past 21 years, the company achieved revenue of 160.64 billion yuan, with a year-on-year increase of 23.9%. During the period, the area of the company’s real estate projects completed, delivered and carried forward increased, and the release of carried forward income accelerated; The total profit was 22.84 billion yuan, a year-on-year decrease of 5.25%. In 21 years, the company realized a net profit attributable to the parent company of 10.37 billion yuan, a year-on-year decrease of 15.4%. The decline in profit was mainly due to 1) the settlement cycle of high-priced land projects from 2017 to 2018, and the addition of recent real estate price limit and other regulatory policies curbed the overall profitability of the industry; 2) The company prudently made provision for asset impairment of 4.37 billion yuan for inventories and investment properties; 3) The company’s investment income decreased by 2.38 billion yuan year-on-year. It is worth noting that the company’s non net profit attributable to the parent company in 21 years recorded 8.86 billion yuan, down only 2.5% year-on-year, with strong toughness.
2) sales increased against the trend and significant results were achieved in deep cultivation. In the past 21 years, the company achieved a sales area of 14.645 million square meters, with a year-on-year increase of 17.8%; The sales amount reached 326.83 billion yuan, a year-on-year increase of 17.7%. According to the sales list of Kerui top 100 real estate enterprises in 21 years, the company’s industry ranking was promoted to No. 7 (No. 10 in 20 years). At the same time, the company has achieved remarkable results in urban deep cultivation. In the current period, the sales scale in 7 cities such as Shenzhen, Shanghai and Suzhou ranks among the top three in the local area, and the sales scale in 16 cities ranks among the top ten in the local area. The company’s sales target in 22 years was 330 billion yuan, with a steady increase.
3) the intensity of land acquisition is relatively positive, and adhere to the layout of high-energy cities. In the past 21 years, the company acquired 113 pieces of land, corresponding to 15.59 million square meters of newly added capacity construction area (equity ratio 56.8%), and the land acquisition intensity of area caliber is about 106.5%. In the 21st year, the company focused on core cities such as Shanghai, Nanjing, Guangzhou, Hangzhou, Wuhan and Chongqing. The land acquisition amount of first and second tier cities accounted for about 74%, which is conducive to ensuring the follow-up supply and mitigating the risk of de urbanization of low-energy cities.
4) the holding business moves forward steadily, and diversified business formats promote the growth of revenue. By the end of the 21st century, the company had a total rentable area of 4.524 million square meters, including business centers, office buildings, hotels, apartments, factories and other diversified business forms. In the past 21 years, the company achieved a rental income of 3.41 billion yuan, a year-on-year increase of 18.0%, and the overall rental rate was nearly 84%.
Profit forecast, valuation and rating: the company’s predicted net profit attributable to the parent company for 22-23 years is 10.65 billion yuan and 11.21 billion yuan respectively, and the predicted net profit attributable to the parent company for 24 years is 12.1 billion yuan; The current stock price corresponds to the PE valuation of 22-24 years, which is 10.5, 9.9 and 9.2 times. The company’s sales performance is outstanding, the energy level of the local city is improved, the finance remains stable and the credit advantage is obvious. It is optimistic about the future development potential of the company and maintains the “buy” rating.
Risk warning: the severity and duration of regulation policies in the real estate industry may exceed expectations; Sales progress is limited by bank loan concentration management or less than expected; The project construction and settlement progress may be less than expected.
