Recently, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) (Stock Code: China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) . SZ) released the performance in 2021. According to the data, in 2021, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) continued the situation of “increasing revenue without increasing profit” in 2020, with a revenue of 160643 billion yuan, a year-on-year increase of 23.93%; The net profit attributable to listed companies was 10.372 billion yuan, a year-on-year decrease of 15.35%.
In response, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) financial director Huang Junlong said that the decline in gross profit margin is a common phenomenon in the industry. In addition, he said that the high-priced land acquired in 2017 and 2018 has been carried forward in the past two years, which is an important reason for the decline of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) gross profit margin. Next, the land acquisition projects in 2019, 2020 and 2021 will begin to carry forward, especially the profit margin of some land acquired in the second half of last year and this year. Accordingly, the subsequent gross profit margin will increase.
gross profit margin fell for three consecutive years
The data shows that China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) achieved an annual contracted sales area of 146447 million square meters in 2021, with a year-on-year increase of 17.77%; The contracted sales amount was 326834 billion yuan, a year-on-year increase of 17.73%.
In terms of revenue, the total revenue of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) in 2021 was 160643 billion yuan, with a year-on-year increase of 23.93%. From the perspective of income type, the revenue of community development and operation, park development and operation, cruise industry construction and operation accounted for 79.63%, 20.25% and 0.12% respectively.
However, although both sales and revenue are rising, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ‘s profit is declining. In 2021, the net profit of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) attributable to listed companies was 10.372 billion yuan, a year-on-year decrease of 15.35%; The gross profit margin was 25.47%, a year-on-year decrease of 3.22 percentage points. So far, the gross profit margin of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) has decreased for three consecutive years.
China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) chief financial officer Huang Junlong said at the 2021 performance meeting and investor exchange meeting that the decline of gross profit margin is a common phenomenon in the industry. He said that the high-priced land acquired in 2017 and 2018 has been carried forward in the past two years, which is an important reason for the decline of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) gross profit margin. Next, the land acquisition projects in 2019, 2020 and 2021 will start to carry forward, especially some land acquired in the second half of last year and this year. After that, the profit margin may increase, and the subsequent gross profit margin will increase accordingly.
In addition, in terms of improving the gross profit margin, chairman Jiang Tiejun said that in the future, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) we should carry out fine management from the dimensions of development, design, cost, supply, marketing, finance, organization and so on.
2022 sales target 330 billion
It is reported that the asset liability ratio of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) 2021 was 61.67%, less than 70%; The net debt ratio is 42.82%, less than 100%; The cash short debt ratio is 1.25, greater than 1, and the three indicators are in the green standard. In 2021, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) mainly financed through banks, bonds, bills, asset securitization and other means, with a comprehensive capital cost of 4.48%. In addition, in 2021, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) obtained 113 land, an increase of 15 over 2020, and the investment in core cities accounted for 90%, an increase of 10 percentage points over the same period.
At the performance meeting, Jiang Tiefeng, the managing director of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) revealed that the annual sales target of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) in 2022 was 330 billion yuan, which was consistent with the target of 2021.
So, what is the land acquisition plan of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) in 2022? Jiang Tiefeng said that China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) will set investment based on efficiency and live within income on the premise of meeting the company’s cash flow safety, green three red lines and declining net debt ratio. Land acquisition should follow the principle of “rather lack than abuse”, that is, “you’d rather not take land than take the wrong land”. In Jiang Tiefeng’s view, “bidding, auction and listing” and “acquisition and merger” are in the same position. However, he said that in 2022, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) the proportion of land acquisition through “bidding, auction and listing” will be higher than that of acquisition and merger, because after a lot of local auction in the second half of last year, many local governments will now take out some good plots.
Recently, private real estate enterprises have stormed one after another. Due to the advantages of central state-owned enterprises in terms of capital, the collection and M & A of central state-owned enterprises in the market has attracted extensive attention. In this regard, Jiang Tiefeng said that the principle of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) acquisition and M & A is very simple, that is, good commercial return and high return to shareholders. However, compared with bidding, auction and land acquisition, M & A risks will be more. Therefore, the company will have higher requirements for risk control of acquisition and M & A. He said that many projects now look very good, but after the due diligence, there are many problems, so China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) the attitude of M & A is to actively look for and promote it cautiously.
According to the principle of Jiang Tiefeng’s use of M & A, . According to caixin.com, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) registered a winning vote of 3 billion yuan in M & A in early 2022, which is the first enterprise to successfully register real estate M & A bonds after the central bank’s statement. However, the M & A bonds are not invested in the projects of private enterprises that have recently been in danger, but an old reform project under the local state-owned enterprise Shanghai real estate (Group) Co., Ltd.
At the performance meeting, investors asked whether the current market environment is an opportunity for central state-owned real estate enterprises to catch up. Xu Yongjun said that in the current situation of rapid market clearing, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) does not only pursue scale, but also the result of operation. For China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , any scale is an effective scale, and the important thing is how to do better on the basis of “stability”.
How to do better, then? At the performance conference, Xu Yongjun stressed that in the future, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) there will be three major changes, that is, from focusing on development to paying equal attention to development and operation, from emphasizing assets to neglecting assets, and from homogeneous competition to differentiation.
China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) divides assets into three categories. Jiang Tiejun said that China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) ‘s core high-quality assets will not be transferred; Industrial and financial assets occupy a large amount of funds. At present, China’s foreign industry REITs have been built and will continue to operate; Historically, with the commercial assets, inefficient or ineffective assets held by houses, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) will actively convert them into cash and then convert them into high-quality assets to improve the quality of assets. In addition, Jiang Tiejun also said that China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) has recently strengthened the old reform, and these projects will also contribute to the profits of the company.
Since the second half of last year, many real estate enterprises began to storm, and the pre-sale regulatory policies around the country have become more and more strict, which has also brought some pressure to real estate enterprises. Huang Junlong said that at the beginning of 2021, the regulatory capital of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) consolidated statement was 15.5 billion yuan, accounting for 9% of the 164.2 billion yuan of consolidated statement returns. At the end of 2021, the regulatory capital of consolidated statement was 23.1 billion yuan, accounting for 12% of the 184 billion yuan of consolidated statement returns, an increase of 3 percentage points. However, Huang Junlong said that from the current situation, it is difficult for local governments to relax the supervision of pre-sale funds due to the pressure of guaranteed delivery. However, due to the company’s good qualification, good credit and stable cash flow, from the perspective of enterprise policy implementation, the changes of regulatory policies are relatively friendly to China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) .
