\u3000\u3 Ping An Bank Co.Ltd(000001) 979 China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) )
Company overview. (1) Historical evolution China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) is an enterprise in the comprehensive development and operation of cities and parks under China Merchants Group. It was established in 1979 and restructured and listed in 2015. The development process of the company is divided into three stages. ① Initial development stage (19792000). In 1979, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) was established, and then the development and operation process of Shenzhen Shekou Industrial Zone for more than ten years was started; In 1981, the real estate department of Shekou industrial zone construction headquarters was established, becoming the predecessor of the subsidiary investment real estate; In 1999, China Merchants real estate was injected into the listed company Shekou Port Co., Ltd. to achieve listing. ② National layout stage (20 Huangshan Novel Co.Ltd(002014) ). After the listing of China Merchants real estate, the subsidiary began to expand nationwide, successively entered the first and second tier cities such as Shanghai, Beijing, Chongqing and Suzhou, and completed the layout of 30 cities in China by 2014. ③ Complete the restructuring and the strategic stage of “Qiangang Central District Houcheng” (since 2015). In 2015 China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) absorbed and merged China Merchants real estate, realizing the overall listing of the urban comprehensive development and operation sector under China Merchants Group. After listing, the company proposed the strategy of “front port – central area – back city”, which corresponds to three business sectors, cruise industry, park and residential development. From 2017 to 2021, the sales scale of China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) has leapt from 100 billion to 300 billion. (2) Corporate governance. The company is the core enterprise of China Merchants Group. By the end of 2021, China Merchants Group held 67.9% of the company’s shares. The company adopts the management structure of headquarters + business division + regional group. (3) Business overview. Community development and operation is the largest source of income of the company, accounting for 80% or more of the total revenue for a long time; The second largest source of revenue of the company is the development and operation of the park. In 2021, the revenue accounted for about 20%, and the revenue of cruise business accounted for relatively low. Starting from the development of Shekou Industrial Zone, the company has accumulated rich experience in industrial linkage development and urban renewal. In 2021, the company obtained 9 industrial linkage plots and 14 old transformation projects, and participated in the establishment of Shanghai urban renewal guidance fund with a scale of 80 billion yuan. In June 2021, the company successfully issued the first “Industrial Park” infrastructure public offering REITs in China.
Business and financial analysis. (1) Asset side. ① In terms of soil storage quality, the newly added soil storage of the company from 2020 to 2021 is concentrated in second tier cities, focusing on “strengthening the heart 30 cities”, focusing on the Yangtze River Delta and Pearl River Delta, with key cities including Chengdu, Wuhan, Shanghai, etc; The company’s turnover capacity is acceptable, and the average project development cycle is 3.2 years, which is basically the same as the median of the sample real estate enterprises. ② In terms of investment rhythm, after the reorganization of the company in 2015, the pace of land acquisition was fast, and the intensity of land acquisition remained at a high level from 2016 to 2018h1. From 2018h2 to 2019, with the tightening of macro policies and the upgrading of regulation and control in major cities, the pace of land acquisition slowed down significantly. In 2020, under the impact of the epidemic, the regulation of the real estate market was slightly relaxed, and the land acquisition intensity of the company rebounded. In 2021, affected by the obvious tightening of real estate policies and centralized land supply, the pace of land acquisition by the company slowed down slightly, and the intensity of land acquisition decreased to 44.1%. ③ In terms of sales, after the reorganization and listing of the company, the contract sales maintained a rapid growth, achieving the goal of 100 billion in 2017, exceeding 200 billion in 2019 and 300 billion in 2021. In 2021, the sales growth rate was 17.7%, and the top 20 real estate enterprises had negative growth in the same period. ④ In terms of settlement capacity, benefiting from the rapid growth of contract sales, the growth rate of the company’s operating revenue has maintained a high level in recent years, with a year-on-year increase of 23.9% in 2021. At the end of 2021, the company’s contract liabilities reached 148.71 billion, an increase of 12.8% at the same time. There is a certain guarantee for future settlement. (2) Debt side stability. (1) In terms of debt structure, the company’s financing sources are mainly bank loans, and the mortgage pledge ratio of interest bearing liabilities is low. The proportion of short-term debt has continued to decline in recent two years, only 21.7% at the end of 2021, down 11.5pct from 2020. (2) In terms of solvency, from 2015 to 2021, the company’s cash short-term debt ratio continued to remain at more than double, the scale of short-term debt decreased in 2021, and the cash short-term debt ratio increased to 1.8 times; In recent years, the net debt ratio of the company has remained at an excellent level below 75%, and it was 48.4% at the end of 2021; The pre estimated asset liability ratio has remained below 70% for a long time and was 64.3% at the end of 2021. (3) In terms of financing capacity, corporate bond financing has remained smooth since 2022, with a total of 7.49 billion bonds and 3.93 billion net financing from January to March. At the same time, the duration of bond issuance was slightly longer, and the cost of bond issuance decreased.
Investment suggestions: (1) residential development sector. Combined with the business objectives disclosed by the company and the land acquisition situation in recent years, assuming that the growth rate of the company’s sales amount from 2022 to 2024 is 1% / 5% / 5%, the growth rate of carry over area is 8% / 6% / 4%, and the growth rate of the company’s residential development income from 2022 to 2024 is predicted to be 14% / 12% / 4%; (2) Park Development section. Combined with the past revenue growth and gross profit margin, it is assumed that the revenue growth rate will remain about 15% and the gross profit margin will remain about 45% from 2022 to 2024; (3) Cruise section. The impact of the epidemic is obvious. It is assumed that the revenue growth rate of this sector from 2022 to 2024 is 0% / 10% / 50% respectively. Overall, it is predicted that the operating revenue of the company from 2022 to 2024 will be 182.9/205.2/218.3 billion yuan, the net profit will be 18.6/205/22.3 billion yuan and the EPS will be 1.45/1.55/1.63 respectively. For the first time, it is rated as “overweight-a”, and the six-month target price is 19.5 yuan / share.
Risk tips: real estate regulation exceeded expectations, data processing deviation, etc
