\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 155 Seazen Holdings Co.Ltd(601155) )
The company’s revenue grew steadily, and the net profit attributable to the parent company was dragged down by the decline in the gross profit margin of development: in 2021, the company achieved an operating revenue of 168.2 billion yuan, a year-on-year increase of 15.6%; The net profit attributable to the parent company was 12.6 billion yuan, a year-on-year decrease of 17.4%. The gross profit margin decreased by 3.5% from the previous year, mainly due to a decrease of 3.5% from the previous year. Through the detailed breakdown of various business types, it can be found that the gross profit margin of development property settlement decreased by 4.1 percentage points to 17.7%, while the gross profit margin of investment property rent increased by 1.9 percentage points to 72.6%.
The development and sales remained resilient and the soil storage structure was reasonable: in 2021, the company achieved a sales area of 23.55 million m2, with a year-on-year increase of 0.2%, while the sales amount was 233.8 billion yuan, with a year-on-year decrease of 6.9%, which was mainly affected by the year-on-year decrease of 7.1% in the average sales price. The company’s current soil storage can still meet the needs of development and operation in the next 2-3 years, and the structure is reasonable. By the end of 2021, the total land reserve of the company was 138 million square meters, of which the first and second tier cities accounted for about 37%, and the third and fourth tier cities in the Yangtze River Delta accounted for about 30%. In 2021, the company added 21.58 million square meters of earth storage construction surface, of which commercial complex projects accounted for 48%.
The strong growth of investment properties helped the company through the cycle: in 2021, the company achieved property rental and management revenue of 8 billion yuan, a year-on-year increase of 46.6%, mainly benefiting from the increase in the number of shopping malls opened and the year-on-year increase of 33% to 12.48 million square meters. In 2021, the company opened 30 Wuyue squares (including 4 entrusted management projects in operation). By the end of 2021, the company had set up 188 Wuyue squares in 135 cities, 130 of which had been opened and entrusted for management, with an average occupancy rate of 98%, of which 26 Wuyue squares had a total operating income of more than 100 million yuan. It is expected that 25 Wuyue squares will be newly opened in 2022, with a commercial operation revenue target of 10.5 billion yuan.
Financial stability and entering the “green gear”: by the end of 2021, the net debt ratio of the company under supervision was 48%, maintaining a low level; The cash short-term debt ratio is 1.07, with good short-term solvency; The asset liability ratio after excluding advance receipts is 69.95%. According to the “three red lines”, all indicators of the company meet the green requirements. The company operates steadily and has good credit standing. In 2021, the net operating cash flow of the company was 22 billion yuan, which was positive for four consecutive years; The average financing cost was 6.57%, down 0.15 percentage points from the previous year.
Investment suggestion: the development and sales of the company remain resilient, and the investment property grows strongly. It is estimated that the net profit attributable to the parent company in 2022 and 2023 will be 13.13 billion yuan and 13.87 billion yuan respectively, the EPS corresponding to the latest share capital will be 5.81 and 6.14 yuan respectively, and the PE corresponding to the latest share price will be 5.3 and 5.0 times respectively, maintaining the “buy” rating.
Risk tip: the sales and settlement of the company’s development property are less than expected, the rental income of the investment property is less than expected, the profitability is further down than expected, or the deterioration of the market environment is more than expected.
