\u3000\u3000 China Vanke Co.Ltd(000002) China Vanke Co.Ltd(000002) )
Events
The company issued the annual report of 2021: the operating revenue in 2021 was 452.8 billion yuan (year-on-year + 8%); The net profit attributable to the parent company was RMB 22.5 billion (year-on-year - 45.7%); The basic earnings per share was 1.94 yuan (year-on-year - 46.4%). The dividend ratio hit a record high. The company plans to distribute a total dividend of 11.28 billion yuan, accounting for 50.1% of the net profit attributable to the parent company.
The scale of commercial housing sales reached a new high, and the high land housing ratio of settlement projects put pressure on the gross profit margin
A) the sales scale of commercial housing reached a new high in 2021, but the overall sales scale shrank. Calculated according to the full caliber sales amount, during the reporting period, the company achieved a sales amount of 627.78 billion yuan (year-on-year - 10.8%); Over the same period, the sales amount of commercial housing reached 18.2 trillion yuan (year-on-year + 4.8%). By quarter, the year-on-year growth rate of national commercial housing sales was 88.5%, 17.2%, - 14.1% and - 18.7% respectively. The trend of high before the market and low after the market was obvious. b) The net profit attributable to the parent company decreased by 46%, mainly due to the following three factors: I) the decline of gross profit margin. During the reporting period, the company's gross profit margin was 21.8% (year-on-year -7.4pct), which was mainly affected by the increase of land price of settlement projects in the proportion of selling price in recent years; II) the investment income fell. The investment income in 2021 was 6.61 billion yuan (year-on-year - 51.1%), mainly due to the decline in the gross profit margin of joint projects and the decrease in the income from investing in other businesses; III) provision for asset impairment loss. The market was significantly down in the second half of 2021. According to the principle of prudence, the company made provision for asset impairment of 3.53 billion yuan for some projects and individual equity investments. c) The current settlement income maintained growth, while the scale of sold and outstanding resources decreased. During the reporting period, the company achieved a settlement income of 402.27 billion yuan from real estate development business (year-on-year + 6.6%); Within the scope of consolidated statements, 46.735 million cubic meters of sold and outstanding resources (year-on-year - 5.0%) and 71.8 billion yuan of contract amount (year-on-year + 1.8%) are expected to be released continuously in the future.
Expand storage, carefully focus on the first and second lines, and actively explore the urban renewal mode
Under the influence of the new policy of "two concentration" of land supply, the disturbance of the company's land acquisition rhythm has a great impact. Therefore, on the basis of adhering to the cautious land acquisition and focusing on the first and second tier high-quality resources, the company actively explores the urban renewal mode. a) 49.8% of the new investment amount is located in the first and second tier cities. During the reporting period, the company added 148 projects (year-on-year - 11.9%), the total equity land price was about 140.15 billion yuan (year-on-year + 1.4%), and the average land price of new projects was 6942 yuan / m2 (year-on-year + 3.5%). b) Actively explore the urban renewal model. The company participated in the old city reconstruction project, with a total construction area of about 5.347 million m3. In December 2021, the company participated in the investment of Shanghai urban renewal guidance fund and deeply participated in the cause of Shanghai urban renewal. The raising scale was RMB 10 billion. The subscribed capital contribution of Shanghai Vanke, a subsidiary of the company, was RMB 2 billion, accounting for 20%.
The "three red lines" maintain the green file and adhere to the consistent financial stability strategy
By the end of the reporting period, the total assets of the company had reached 1.94 trillion (year-on-year + 3.72%); Net assets of 392.8 billion (year-on-year + 12.3%); Monetary capital was 149.35 billion yuan (year-on-year - 23.5%). All indicators meet the "three red lines" medium and green enterprise standards, in which the asset liability ratio excluding advance receipts is 68.4%, the net debt ratio is 29.7%, and the cash short debt ratio is about 1.5. a) Liabilities: as of the end of the reporting period, the company's interest bearing liabilities amounted to 265.96 billion yuan, a year-on-year increase of 2.9%. The bonds due in 2022 totaled 11.376 billion yuan, and there were 8 matured loans of 31.931 billion yuan. b) Financing: during the reporting period, the company completed the issuance of corporate bonds with a total amount of 1.57 billion yuan, the issuance of special corporate bonds for Housing leasing with a total amount of 6 billion yuan in two times, and the issuance of medium-term notes with a total amount of 6 billion yuan in three times, with a minimum coupon rate of 3.08%; In addition, the company completed the issuance of RMB bonds with a total amount of 1.445 billion abroad, with a coupon rate of 3.45%. The company has maintained a positive net operating cash flow for 13 consecutive years. By the end of 2021, the comprehensive financing cost of the company's stock financing was 4.11%, which is a low level in the industry.
Diversified businesses are developing in synergy, and everything cloud needs to be spun off and listed urgently
The strategic upgrading of the company, with equal emphasis on development, operation and service business, is the strategic choice for the company to realize future value growth. 1) Property services: covering the "residential mall", it is urgent to be split and listed. During the reporting period, all things cloud achieved an operating revenue of 24.04 billion yuan (year-on-year + 32.1%). Among them, the income from community space services was 13.46 billion yuan (year-on-year + 22.9%), accounting for 56.0%; The income of commercial enterprises and urban space services was 8.72 billion yuan (year-on-year + 38.1%), accounting for 36.2%; The service revenue of aiot and bpaas solutions was 1.86 billion yuan (year-on-year + 99.5%), accounting for 7.8%. In November 2021, the company deliberated and approved the relevant proposal to spin off all things cloud and list on the Hong Kong stock exchange. As of the disclosure date of this report, in March 2022, omnicloud has submitted application materials for overseas initial public offering to the CSRC. 2) Commercial development and operation: steady growth and significant advantages of the Yangtze River Delta. During the reporting period, the business income of commercial business (including non consolidated items) was 7.62 billion yuan (year-on-year + 20.6%), with a total construction area of 11.392 million m3. Among them, the operating revenue of commercial projects managed by Yinli is 5.23 billion yuan (year-on-year + 23.9%), the same store's year-on-year revenue is + 12.1%, the overall rental rate is 95.3%, and third-party projects account for 61%. The company has a significant competitive advantage in the Yangtze River Delta, with the Yangtze River Delta accounting for 52% (Shanghai and Hangzhou accounting for 27%). 3) Logistics and warehousing services: National warehouse network layout and introduction of war investment. In 2021, the logistics business (including non consolidated items) achieved an operating revenue of 3.16 billion yuan (year-on-year + 68.9%), and the overall noi reached 6.5%. In addition, four internationally renowned strategic investors including GIC and Temasek were successfully introduced. 4) Rental housing: the opening scale is firmly in the forefront of the industry. During the reporting period, the rental housing business (including non consolidated projects) achieved an operating income of 2.89 billion yuan (year-on-year + 13.9%). As of the end of the reporting period, the Park apartment has opened a total of 159500, with an average annual rental rate of 95.3% and a customer renewal rate of 58%, which has an obvious leading advantage in the industry.
Investment advice
The company adheres to the strategic transformation of "urban and rural construction and living service provider", with abundant land storage resources, reasonable structure, stable finance, meeting the requirements of "green file", and the financing cost is at an excellent level in the industry. In the context of the slowdown in the growth of the industry, the company achieved steady growth and gradually entered the return period by virtue of the linkage between diversified business and main business and synergy. It is estimated that the company's EPS from 2022 to 2024 will be 3.06, 3.32 and 2.34 yuan respectively, corresponding to 6, 6 and 8 times of the current share price PE respectively, maintaining the "buy" rating.
Risk tips
Sales fell short of expectations, regulatory policies tightened beyond expectations, financing costs rose, profit margins fell, and the equity ratio of new projects decreased.
