\u3000\u3000 China Vanke Co.Ltd(000002) China Vanke Co.Ltd(000002) )
Event: the company released its performance in 2021, with operating revenue of yoy + 8% and net profit attributable to the parent company of yoy-46%. In 2021, the company achieved operating revenue of 452.8 billion yuan (RMB, the same below) yoy + 8.0%; Net profit attributable to parent company is 22.5 billion yuan yoy-45.7%; The cash on hand at the end of the period was 149.4 billion yuan yoy-23.5%.
Comments: the provision for asset impairment is sufficient, the gross profit margin of real estate development is gradually repaired, and the long-term valuation is improved
1. Sufficient provision for asset impairment and gradual restoration of profit margin: in 2021, the company achieved an operating revenue of 452.8 billion yuan yoy + 8.0%; The net profit attributable to the parent company was 22.5 billion yuan yoy-45.7%. The reasons for the large deviation between the decline of profit and the growth of revenue include:
1) there are many low gross profit margin items in the settlement structure this year, and the overall settlement gross profit margin is 21.8%, down 7.4pct year-on-year; Among them, the gross profit margin of real estate development and asset management was 21.7%, down 10.8pct year-on-year;
2) in 2021, the overall fluctuation of the real estate industry exceeded expectations, and the profitability of the whole industry decreased, resulting in the decline of the gross profit margin of joint venture projects, and the investment income decreased by 6.9 billion yuan year-on-year;
3) based on the principle of financial prudence, the company conducted a comprehensive impairment test on the assets at the end of 2021 and accrued about 3.53 billion yuan of asset impairment (including 3.12 billion yuan of inventory impairment and 410 million yuan of other assets impairment);
4) looking forward to the future, the company will improve the management concentration, optimize the investment of resources, and fully withdraw the inventory impairment, which is conducive to the improvement of the settlement gross profit margin of subsequent projects. We believe that the company's subsequent operating profit margin will be gradually repaired.
2. Diversified track to improve long-term Valuation: the diversified business of the company started earlier and ranks in the forefront of the industry. The three-year income CAGR of the long-term rental apartment sector is 40%. By the end of 2021, 159500 parking apartments have been opened, with an average rental rate of 95.3%; The three-year revenue CAGR of logistics and warehousing sector is 52%, of which the revenue in 2021 is 3.16 billion yuan yoy + 68.9%; The five-year revenue CAGR of the commercial development and operation sector is 20%, of which the revenue in 2021 is 7.62 billion yuan yoy + 20.6%; Diversification is conducive to improving the company's long-term valuation.
3. Obvious credit advantages and generous dividends: by the end of 2021, the company's pre emptive asset liability ratio was 69.8%, the net debt ratio was 29.7%, the cash short debt ratio was 2.5x, "three red lines" green, and the net operating cash flow was positive for 13 consecutive years; In 2021, the company's comprehensive financing cost was 4.1%, with obvious credit advantages; In 2021, the dividend payout rate was 50.1%, the dividend per share was 0.97 yuan, and the dividend payout was generous; At the same time, the company announced on March 31, 2022 that it planned to repurchase A-share shares within three months with the maximum repurchase capital of 2.5 billion yuan and the maximum repurchase price of 18.27 yuan / share. The maximum repurchase amount reached 137 million shares, accounting for 1.18% of the current total share capital of the company, demonstrating its development confidence.
Profit forecast, valuation and rating: the current epidemic has repeatedly affected the operation. The forecast of net profit attributable to parent company in 202223 has been lowered to 27.4 billion yuan (down 25.5%), 33.2 billion yuan (down 13.0%), and the forecast of net profit attributable to parent company in 2024 has been increased to 39.5 billion yuan; The current A-share price corresponds to the PE valuation of 202224, which is 9 / 8 / 6 times, and the H-share price corresponds to 7 / 6 / 5 times. The company's early impairment provision is sufficient, the profit margin is expected to be gradually repaired, the diversified business improves the long-term valuation and maintains the "buy" rating.
Risk tips: the epidemic affected sales less than expected, the economic downturn more than expected, and the completion of the project less than expected.
