\u3000\u3 Ping An Bank Co.Ltd(000001) 979 China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) )
Event: on April 5, 2022, the company issued an announcement on signing strategic cooperation agreements with great wall assets and jiazhaoye group.
Key investment points
Integrating the resources of jiazhaoye Bay Area: the company plans to establish a strategic cooperative relationship with great wall assets and jiazhaoye group to carry out tripartite cooperation on jiazhaoye’s high-quality assets in Dawan district. According to the announcement, the assets of this tripartite cooperation mainly involve three aspects: 1) promoting urban renewal cooperation: the company gives full play to its comprehensive development strength in communities, commercial and industrial parks, and has the power of the Ministry of finance Great Wall Asset Management with the background of national social security fund gives full play to the advantages of asset management and combination of industry and finance, while jiazhaoye gives full play to the advantages of urban renewal. Based on the urban renewal reserve resources of jiazhaoye in the core cities of Dawan district such as Shenzhen, Guangzhou, Dongguan and Foshan, the three parties continue to put mature projects into the tripartite cooperation platform; 2) Promote cooperation in commercial and residential development and commercial operation: the three parties intend to revitalize the existing commercial and residential development and commercial complex operation projects through equity cooperation, asset transfer and joint operation; For incremental projects, it is proposed to take the way of joint acquisition and development to give full play to the advantages of all parties; 3) Jointly discuss the cooperation of cultural tourism, cruise ship and ferry: the three parties give full play to their respective advantages and jointly explore and strengthen the cooperation in cultural tourism, ferry and other businesses in Dawan district.
Resource integration further consolidated regional advantages: 1) sales: the company continued to cultivate core cities, and achieved a total contracted sales amount of 326.83 billion yuan in 21 years, a year-on-year increase of + 17.7%, still achieving double-digit growth under the cooling of 21h2 market. Among them, the sales scale of 7 core cities such as Shenzhen, Shanghai, Suzhou and Nanjing ranked among the top three, and the sales scale of 16 cities ranked among the top ten. 2) Land acquisition: land acquisition focuses on high-energy cities and core urban agglomerations. In the past 21 years, the company has acquired 113 new land, with a total capacity of 15.59 million square meters and an equity area of 8.86 million square meters, of which the total investment proportion of the Yangtze River Delta and Dawan District exceeds 70%. The company has strong comprehensive development strength, and has abundant resources to be developed in the core position of Shenzhen, the core city of Dawan District, such as Shekou, Taiziwan, Qianhai, Shenzhen International Convention and Exhibition Center and other areas. We believe that the integration of jiazhaoye’s high-quality urban renewal and commercial and residential projects in Dawan district will help the company strengthen its deep cultivation in Dawan district and its surrounding areas, supplement high-quality land resources, improve its comprehensive competitiveness and consolidate its development advantages in Dawan district. The joint cooperation of the United Nations asset management company is conducive to the company’s control of cooperation risks.
The financing advantages of central enterprises have helped open the prelude to M & A. The “three red lines” of the company remained green for 21 years, with an asset liability ratio of 61.67%, a net debt ratio of 42.82%, a cash short debt ratio of 1.25 and a comprehensive capital cost of 4.48%. The company’s financial stability, obvious financing advantages, and smooth financing channels, took the lead in issuing M & a medium-term notes in January 22. We believe that the blessing of M & a financial instruments will help the company achieve positive expansion and further improve its market share in the process of optimizing the industry structure.
Investment advice: buy. We believe that the company enjoys obvious financing advantages under the credit endorsement of central enterprises, which is conducive to further consolidating its fundamentals in this round of industry adjustment. The company has deep government and industrial resources and strong comprehensive development strength, which helps to broaden land acquisition channels and enhance anti cyclical. We estimate that the company’s net profit attributable to the parent company from 22 to 24 years is RMB 11.2 billion, 12.3 billion and 14 billion, corresponding to EPS of RMB 1.41, 1.55 and 1.77. Considering the strong comprehensive development strength of the company and taking the lead in resource integration, it is expected to transform the high-quality soil storage in core cities and improve the regional market share. A certain premium will be given to the valuation. The company will be given a 15 times PE valuation in 2022, with a target price of 21.2 yuan, maintaining the “buy rating”.
Risk tip: the relaxation degree and speed of regulatory policies are lower than expected, and there are transformation and integration risks in M & A projects.
