Talk every Monday: the annual report of real estate enterprises reveals that the fundamentals of leading real estate enterprises are stable
This week, real estate enterprises successively disclosed their annual reports. We paid attention to the annual reports of Longhu group, Yuexiu real estate, China Construction Development International, Greentown China and Xuhui holdings. On the whole, several leading real estate enterprises are in a state of revenue growth, downward profitability, reduced leverage, small sales growth and cautious land acquisition.
In 2021, five real estate enterprises still maintain a certain revenue growth rate. The revenue growth rate of the five real estate enterprises was more than 20%, with the highest growth rate of 53% in Greentown China and the slowest growth rate of 21% in Longhu. Compared with the historical average level of the company in recent four years, Longhu is 12 percentage points lower than the average value. Due to the high average value of performance in recent years, the revenue growth rate of China Construction Development International in 2021 is 97 percentage points lower than the average level, Yuexiu real estate is basically flat, Xuhui and Lvcheng are 26 and 14 percentage points better than the average value respectively. In the second half of 2021, the revenue of real estate enterprises did not decline significantly. Except that the year-on-year growth rate of revenue of China Construction Development International in 2021 dropped significantly compared with the first half of 2021, the year-on-year growth rate of revenue of the other four real estate enterprises in the second half of the year was generally better than that in the first half of the year.
The profitability of the five real estate enterprises has declined. The average gross profit margin and net profit margin of the five real estate enterprises in 2021 were 20.1% and 7% respectively, a decrease of 3.2 and 1.5 percentage points compared with last year. Among them, Longhu has the strongest profitability, with gross profit margin and net profit margin of 25.3% and 10.7% respectively. The profitability is one position higher than that of other real estate enterprises.
The leverage level of real estate enterprises continues to decline. In 2021, the asset liability ratio of five real estate enterprises excluding advance receipts showed a downward trend. The average asset liability ratio of the five real estate enterprises excluding advance receipts has decreased from 73.4% in the first half of 2019 to the latest 69%, a decrease of 4.4 percentage points. The net debt ratio is within the qualified line. The average net debt ratio of the five real estate enterprises has decreased from 101% in the half year of 2019 to 55%, a decrease of 46 percentage points (mainly due to the decrease of CCDI from 243% to 55%). At present, the net debt ratios of five real estate enterprises, Longhu, Lvcheng, Xuhui, Yuexiu and Jianfa, are 46.9%, 54.9%, 57.5%, 63% and 52.5%, which are far lower than the 100% required by the three red lines. The action of reducing leverage has been effective.
The sales of real estate enterprises maintained a positive growth rate. In the current market downturn period, the leading real estate enterprises have shown strong sales capacity. Among them, the highest increase is Jianfa international. In 2021, the sales increased by 101% year-on-year. Thanks to the positive scale expansion of the company, the sales scale of Jianfa international rose against the market. In addition, Greentown and Yuexiu real estate also recorded 21% and 20% increase in sales scale respectively. The sales of Longhu and Xuhui increased by 7.2% and 7.1% respectively year-on-year.
Real estate enterprises are generally cautious in taking land. Except that the land acquisition area of Yuexiu real estate increased by 64% year-on-year compared with that in 2020, the land acquisition area of other real estate enterprises decreased, and Longhu, Lvcheng, Xuhui and Jianfa decreased by 8%, 14%, 10% and 36% year-on-year respectively. In the context of the current market downturn, real estate enterprises have generally taken a defensive stance, reducing capital expenditure by reducing land acquisition, reserving grain and grass for crossing the cycle and bullets for the future.
Data tracking (March 14-march 20):
New housing market: the transaction area of 30 cities is – 57pct and – 33pct in one week and cumulative year-on-year respectively, first tier cities – 44pct, – 29pct, second tier cities – 69pct, – 67pct, third tier cities – 6pct and + 16pct.
Second hand housing market: the transaction area of second-hand housing in 13 cities was – 37pct year-on-year in a single week and – 29pct year-on-year in total.
Land market: the cumulative construction area of land supply in 100 cities is + 12pct year-on-year, the cumulative construction area of transaction is – 20PCT year-on-year, the cumulative transaction amount is – 61pct year-on-year, and the land transaction premium rate is 2.44%.
City market month on month: Beijing (+ 0.2pct), Shanghai (+ 16pct), Guangzhou (+ 29pct), Shenzhen (- 77pct), Nanjing (- 23pct), Hangzhou (- 19pct), Wuhan (- 4pct)
Investment strategy: it is suggested to pay attention to the leading real estate enterprises Poly Developments And Holdings Group Co.Ltd(600048) , China Vanke Co.Ltd(000002) , Longhu group with stable operation and good credit background. Focus on high-quality real estate enterprises Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , Greentown China, etc. under the product-oriented logic. With the further confirmation at the bottom of the policy, attention can be paid to the repair opportunities of high-quality private enterprises, such as Seazen Holdings Co.Ltd(601155) , Jinke Property Group Co.Ltd(000656) , etc.
Risk tip: the sales market is down, and some real estate enterprises have a storm of debt default.
