\u3000\u3000 China Vanke Co.Ltd(000002) China Vanke Co.Ltd(000002) )
Event: Recently, the company released its 2021 annual report. In 2021, the company achieved an operating revenue of 452798 billion yuan, a year-on-year increase of 8.04%; The net profit attributable to the parent company was 22.524 billion yuan, a year-on-year decrease of 45.75%; The basic earnings per share was 1.94 yuan / share, a year-on-year decrease of 46.50%.
The decline of gross profit margin, the decrease of investment income and the provision for impairment lead to the pressure on profits. In 2021, the company achieved an operating revenue of 452798 billion yuan, a year-on-year increase of 8.04%; The net profit attributable to the parent company totaled 22.524 billion yuan, a year-on-year decrease of 45.75%; The gross profit margin was 21.8%, with a year-on-year decrease of 7.4pct; Roe was 9.78%, a year-on-year decrease of 10.35pct. The increase in income but no increase in profit in this year is mainly due to: 1) affected by the increase in the proportion of land price of settlement projects in the selling price in recent years, the gross profit margin of real estate development business decreased to 23.0% year-on-year; 2) The provision for asset impairment totaled 3.53 billion yuan, reducing the company's net profit attributable to the parent company by 2.55 billion yuan in 2021; 3) The decrease in investment income was affected by the decrease in the income from joint venture projects recognized according to the equity method and the decrease in the income from the disposal of subsidiaries. The investment income of the company decreased by 6.9 billion yuan to 6.61 billion yuan. Among them, the decrease in the investment income recognized according to the equity method was mainly due to the decrease in the gross profit margin of joint venture projects and the decrease in the income from investing in other businesses.
Affected by the downward trend of the market, the sales increased negatively, and the company is rich in sold and outstanding resources. Affected by the market downturn, in 2021, the company achieved a contract amount of 627.79 billion yuan, a year-on-year decrease of 10.8%, a contract area of 36.078 million square meters, a year-on-year decrease of 18.4%. The sales scale has always been at the leading level in the industry, ranking second in the list of Kerry and Rui, with a market share of 3.5%. By the end of the reporting period, the company had sold 46.735 million cubic meters of outstanding resources, a year-on-year decrease of 5.05%, and the contract amount was 71.8 billion, a year-on-year increase of 1.8%.
The company is rich in resources and actively participates in urban renewal. In 21 years, the company has obtained 148 new projects, including 26.674 million square meters of capacity and construction area and 19.014 million square meters of equity, with an area equity ratio of 71.3%. The newly started area was 32.653 million m3, a year-on-year decrease of 17.6%, and 103.7% of the plan at the beginning of the year was completed. The completed area was 35.714 million m3, with a year-on-year increase of 5.6% and 99.6% of the plan at the beginning of the year. The company also has goods for sale under construction, planned and completed in the first and second lines, with a value of 107562 billion yuan. The company has also participated in the practice of different types of projects such as old transformation and old community transformation in many cities. At present, the capacity construction area of the old transformation project is about 5.347 million square meters.
All things cloud "troika" drive together to create excellence and lead the industry. In 21 years, the revenue of all things cloud reached 24.04 billion yuan, with a year-on-year increase of 32.1%, of which the year-on-year growth of community space service, commercial enterprise and urban space service, aiot and bpaas solution service were 22.9%, 38.1% and 99.5% respectively, accounting for 56%, 36.2% and 7.8%. Vanke cloud has a management area of 780 million square meters, a year-on-year increase of 35.9%, a contract management area of 1.01 billion square meters, a year-on-year increase of 38%, and a combined management ratio of 1.3. By the end of the reporting period, the third-party residential projects under the management of omnicloud accounted for 56.9% of the residential projects under the management, and the number of third-party commercial enterprise projects under the management accounted for 84.0% of the commercial enterprise projects under the management. All things Liangxing has won more than 50% of the bidding projects in China in the past 21 years, and has served more than 50 Internet technology enterprises and unicorn enterprises. All things cloud mainly serves first tier, new first tier and second tier cities, accounting for 86.4% of community projects and 89.2% of business enterprises and urban projects.
The scale and efficiency of wanwei logistics have been improved, leading the war to help the business development enter a new stage. In the past 21 years, wanwei logistics (including non consolidated projects) achieved a revenue of 3.16 billion yuan, a year-on-year increase of 68.9%, of which the operating revenue of high-standard warehouse was 2.06 billion yuan, a year-on-year increase of 59.8%; The operating revenue of cold storage was 1.1 billion yuan, with a year-on-year increase of 89%. At present, the scale of cold chain storage of the company ranks first in the world. In 2021, wanwei logistics opened a new business of 1.41 million square meters. Among them, 17 new high-standard libraries have been opened, with a rental construction area of 1.14 million square meters; Eight new cold chain parks have been opened, with a rentable construction area of 270000 square meters. By the end of the reporting period, the total rentable building area of the opening projects was 8.28 million square meters. The rental rate of high-standard warehouse in the stable period of wanwei logistics is 93%, and the utilization rate in the stable period of cold chain is 75%. Wanwei logistics has increased its capital and shares by introducing four strategic investors such as Singapore Government Investment Corporation (GIC) and Temasek. The strategic investors will promote the business to enter a new stage of development.
The rental housing industry is leading, and the export of commercial light assets is getting better and better. The company's rental housing business achieved a revenue of 2.89 billion yuan, a year-on-year increase of 13.9%. By the end of 2021, 208700 long-term rental apartments had been operated and managed, with a total of 159500 opened. The average annual rental rate of opened projects was 95.3%, and the annual rent collection rate was 98.9%. During the reporting period, poyu's comprehensive service capacity of "one-stop production strategy, construction and operation" was significantly improved, providing light asset management output services for affordable rental housing, talent apartments and health post stations of governments and enterprises in many places. The number of asset parties served has reached 294, involving 21000 houses. The company's commercial business revenue was 7.622 billion yuan, with a year-on-year increase of 20.57%. A total of 211 commercial projects were opened, with a construction area of 113916 million square meters, of which 34 were newly opened in 2021, with a construction area of 2.0687 million square meters. The asset light output capacity has gradually matured. By the end of the 21st century, there were 42 printing force output management projects with an output management area of 2.37 million square meters.
The financing channels are unobstructed, and it is a green enterprise. In 2021, Vanke completed the issuance of 1.566 billion yuan of corporate bonds, 6 billion yuan of special bonds for Housing leasing and 6 billion yuan of medium votes, with a minimum coupon rate of 3.08%. The company controlled the financing cost through multiple channels, and the financing environment has been continuously improved since the fourth quarter. The annual comprehensive capital cost was 4.11%. By the end of 2021, the net debt ratio of the company was 29.7%, the asset liability ratio after excluding advances received was 68.4%, and the cash short debt ratio was 1.5, ranking steadily as a green enterprise. In the whole year, the net operating cash inflow was 4.11 billion yuan, which was positive for 13 consecutive years.
The company announced the repurchase plan, and the increase of senior executives' holdings showed their confidence in development. The company announced the plan to repurchase some A shares. The repurchase amount is 2-2.5 billion yuan, the number of shares to be repurchased is 109137 million, the repurchase price does not exceed 18.27 yuan / share, and the repurchase period is within three months from April 29. In addition, the directors, supervisors and senior managers of the company shall increase their holdings of A-Shares within six months from March 30, with a combined amount of no less than 20 million yuan and an increase price of no more than 18.27 yuan.
Investment suggestion: the company has abundant resources, smooth financing channels, and property, logistics, long-term rental apartments and business management businesses go hand in hand. Facing the current difficulties, the company actively adjusts its business strategy, and is expected to stabilize and recover its revenue and net profit in 2022. We expect that the company's earnings per share from 2022 to 2023 will be 2.08 yuan / share and 2.29 yuan / share respectively. Based on the closing price of 20.66 yuan on April 1, the corresponding P / E ratios will be 9.9 times and 9.0 times respectively. We are optimistic about the long-term performance of the company and maintain the "recommended" rating.
Risk warning: the sales deregulation is less than expected and the financing environment fluctuates.
