\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 325 Huafa Industrial Co.Ltd.Zhuhai(600325) )
The revenue grew steadily and the profit margin stopped falling and rebounded: in 2021, the company achieved an operating revenue of 51.24 billion yuan, a year-on-year increase of 0.5%; The net profit attributable to the parent company was 3.19 billion yuan, a year-on-year increase of 10.1%; The net profit margin attributable to the parent company increased by 0.5 percentage points to 6.2% over the previous year, mainly due to (1) the improvement of profitability, and the gross profit margin of real estate development business accounting for 95% of revenue increased by 0.4 percentage points to 25.6% over the previous year; (2) Investment income increased, the proportion of minority shareholders’ profits and losses decreased, and the proportion of net profit attributable to parent increased by 4.7 percentage points to 68% compared with the previous year. The company has sufficient sold and outstanding resources. By the end of 2021, the company’s contract liabilities were 63.3 billion yuan, laying the foundation for future revenue.
Stable sales, sufficient soil storage and strategic deep cultivation in the core area: in 2021, the company achieved a sales area of 4.69 million m2, a year-on-year decrease of 7.0%; The sales amount was 121.9 billion yuan, a year-on-year increase of 1.2%, mainly benefiting from the year-on-year increase of 8.7% in the average sales price to 26000 yuan / m2. Based in Zhuhai and facing the whole country, the company is deeply engaged in core areas such as Guangdong, Hong Kong and Macao, the Yangtze River Delta, Beijing Tianjin Hebei and the Yangtze River economic belt. The project expansion is mainly based on the urban area of core cities and core sections. In 2021, the company’s sales in East China, Zhuhai, South China, Beijing and North regions accounted for 45%, 26%, 19%, 6% and 4% respectively. By the end of 2021, the company has 5.44 million square meters of land reserve capacity and construction area under construction of 15.42 million square meters.
The company has successfully entered the “green gear” and its financial performance has been significantly optimized: by the end of 2021, the company’s net debt ratio was 91%, down 91 percentage points from the previous year, largely due to the capital increase of consolidated subsidiaries by major shareholders controlled by Zhuhai SASAC, which helped the company’s net assets increase by 51% year-on-year; The company’s asset liability ratio excluding advance receipts was 67%, down 9 percentage points from the previous year; The company’s cash short debt ratio was 1.8, and the three red lines met the standard. The company’s debt structure is more healthy. By the end of 2021, the total interest bearing liabilities had decreased by 10% year-on-year, including 40% year-on-year decrease in short-term debt and 20% in short-term debt, a decrease of 8.7 percentage points over the previous year. The financing cost of the company continued to decline. In 2021, the overall average financing cost of the company was 5.8%, a decrease of 0.37 percentage points over the previous year.
Investment suggestion: as a regional leading state-owned enterprise, the company is based in Zhuhai and facing the whole country, with steady performance growth and continuous financial optimization. It is estimated that the net profit attributable to the parent company in 2022 and 2023 will be 3.4 billion yuan and 3.62 billion yuan respectively, the EPS corresponding to the latest share capital will be 1.60 and 1.71 yuan respectively, and the PE corresponding to the latest share price will be 5.1 and 4.8 times respectively, maintaining the “buy” rating.
Risk tip: the sales and settlement of the company’s development properties are less than expected, the decline of industry fundamentals is more than expected, and the policy support is less than expected.
