\u3000\u3 Ping An Bank Co.Ltd(000001) 979 China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) )
Event: the company issued a performance announcement on March 21, 2022.
Key investment points
Revenue grew steadily, and the pressure of impairment was gradually cleared: in 2021, the company achieved revenue of 160643 billion yuan, a year-on-year increase of + 23.9%, net profit attributable to the parent company of 10.372 billion yuan, a year-on-year increase of – 15.4%, and basic earnings per share of 1.16 yuan, a year-on-year increase of – 20.55%. In terms of itemized revenue, the revenue from community development and operation was 127.9 billion yuan, a year-on-year increase of + 26.3%, the revenue from park development and operation was 32.5 billion yuan, a year-on-year increase of + 15.2%, and the revenue from cruise industry construction and operation was 200 million yuan, a year-on-year increase of + 49.5%. The main reasons for the decline of the company’s net profit attributable to its parent company are as follows: (1) the historical high price was carried forward, superimposed on the impact of the price limit policy, and the carried forward gross profit margin decreased by 3.2pct to 25.5% year-on-year (2) the company carefully made impairment provisions for inventory, investment property and long-term equity investment, totaling 4.37 billion yuan; (3) Decrease in investment income: the company actively adjusted the profit structure, and the investment income from the transfer of subsidiaries decreased by 2.45 billion yuan year-on-year.
Sales increased steadily and continued to cultivate core cities: in 2021, the company achieved a total contracted sales area of 14.645 million square meters, a year-on-year increase of + 17.8%, and the contracted sales amount was 326.83 billion yuan, a year-on-year increase of + 17.7%. It still achieved double-digit growth under the cooling of 21h2 Market. The company continues to cultivate core cities. The sales scale of 7 core cities such as Shenzhen, Shanghai, Suzhou and Nanjing ranks among the top three, and the sales scale of 16 cities ranks among the top ten. In 2022, the company will strive to achieve the performance goals of 330 billion yuan of contracted sales, 14 million square meters of new construction area and 14 million square meters of completed area.
Land acquisition focuses on high-energy cities, and there are multiple ways to expand storage: the company has acquired 113 new land in the whole year, with a total capacity of 15.59 million square meters, an equity area of 8.86 million square meters, and the equity ratio has decreased to 56.8%, a year-on-year decrease of 7.5pct, but it is basically the same as the average value in 20182020. In 2021, the company’s equity land price investment accounted for 90% in the designated “strong heart 30 cities”, and the total investment in the Yangtze River Delta, Guangdong, Hong Kong and Macao exceeded 70%. The comprehensive development strength of the company is strong. With its industrial and government resources, the company has formed a unique industry city integration mode, leading the appreciation of cities and regions by creating full life cycle products. We believe that the company’s strong comprehensive development and operation strength and profound government resources are conducive to the company’s expansion of reserves through multiple channels such as industry city linkage, port city linkage, merger and acquisition and urban renewal, so as to effectively control the cost of land acquisition while expanding the scale.
Multi point flowering of holding properties, marching towards the goal of “double hundred”. The company focuses on four major holding properties, including commerce, office buildings, hotels and apartments, and vigorously develops the business in the park. In the past 21 years, the total area of the company’s rentable properties was 4.52 million m2, with a year-on-year increase of 9.4%, of which apartments, residential buildings, office buildings, factories and businesses accounted for 23%, 17%, 28%, 28% and 5% respectively. In 21 years, the comprehensive rental rate of the company was 84%, basically returning to the level of 20 years ago. The average rental unit price was 78.91 yuan / m2 / month, a year-on-year increase of + 8.4%. It is estimated that by 2025, 1.99 million square meters of centralized commerce, 610000 square meters of office buildings, 7323 long-term rental apartment houses and 3481 hotel houses are planned to enter the market, further moving towards double hundred (100 properties held and 10 billion income).
Maintain the financing advantages of central enterprises and maintain the financial stability. The company’s “three red lines” green file, with a comprehensive capital cost of 4.48%. We believe that the company’s financial stability and obvious financing advantages are conducive to maintaining the strength of land acquisition in the current downward cycle of the industry, and the blessing of M & a financial instruments is conducive to the company’s positive expansion.
Investment advice: buy. We believe that the company enjoys obvious financing advantages under the credit endorsement of central enterprises, which is conducive to further consolidating its fundamentals in this round of industry adjustment. The company has deep government and industrial resources and strong comprehensive development strength, which helps to broaden land acquisition channels and enhance anti cyclical. We estimate that the company’s net profit attributable to the parent company from 2022 to 2024 will be RMB 11.2 billion, 12.3 billion and 14 billion, corresponding to EPS of RMB 1.41, 1.55 and 1.77. We will give the company 12 times PE valuation in 2022, target price of RMB 16.97 and maintain the “buy rating”.
Risk tip: the relaxation degree and speed of regulation and control policies are lower than expected, and the transformation speed of land linked projects is lower than expected.
