\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 668 China State Construction Engineering Corporation Limited(601668) )
Policies guide the real estate industry to explore new development models. On April 11, the CSRC, the SASAC and the all China Federation of industry and Commerce jointly issued the notice on further supporting the healthy development of listed companies, which proposed that the real estate industry should adhere to the principle of “housing without speculation” and support listed real estate enterprises to actively transform to a new development model in accordance with the law and regulations. Previously, the central economic work conference and the government work report also clearly pointed out: adhere to the positioning that houses are used for living, not for speculation, and explore new development models. Under the framework of “housing without speculation”, the current real estate regulation policies have been actively adjusted to relax some tightening policies that are not suitable for the current development of the industry. At the same time, support and guide the real estate industry to actively explore new development models. In the future, the industry is expected to enter a virtuous circle and a new stage of healthy development.
Connotation of the new development model of the real estate industry: according to the contents of the government work report and relevant policies, we understand that the new development model mainly includes the following three aspects: 1) development model: transformation from the original “fast turnover and high leverage” to a “competitive quality” model focusing on product quality, refined management, stability and sustainability. 2) Supply mode: develop both rental and purchase, accelerate the development of long-term rental housing market, promote the construction of indemnificatory housing, and pay attention to stock operation. 3) Financing mode: avoid excessive financial leverage, diversified and reasonable financing, maintain a healthy financial structure, revitalize stock assets with the help of REITs and other new tools, optimize the traditional business model and realize more efficient utilization of funds.
China State Construction Engineering Corporation Limited(601668) is the leader in leading the new development model of the real estate industry. The two main industries of real estate and construction are expected to usher in value revaluation:
The real estate business adheres to low leverage, high profitability and quality, and leads the new development model of the industry. CNOOC real estate, the company’s main real estate platform, has long paid attention to product reputation and sustainable development. According to the announcement, it will achieve a net profit margin of 16.6% in 2021 and maintain the first-class level of profitability in the industry; Long term adherence to the prudent financial strategy. At the end of 2021, the asset liability ratio was 58.9%, the net loan ratio was 32.3%, and the weighted average financing cost was 3.55%. All indicators were the lowest range in the industry; It has obtained the industry-leading credit rating of the three major international rating agencies. It is the only enterprise in China’s real estate industry to obtain the international a rating, with excellent asset quality. The company’s Zhonghai property is famous for its high-end positioning and excellent service quality. The properties under management include residential, commercial, government and other types, with outstanding stock operation capacity. During the period when most enterprises generally adopt “fast turnover and high leverage”, the company still adheres to the steady and high-quality development route, has been leading the industry to explore new development models, and its competitive advantage is expected to continue to expand in the future. At present, the supply side reform of the real estate industry is accelerating. As a leader of central enterprises, the company is expected to obtain more high-quality land resources under compliance requirements in the future, or acquire real estate enterprise projects with risks in operation, accelerate industry integration, realize the continuous improvement of market share, and the value is expected to be revalued. Assuming that the company’s construction business is valued at 22pe5x, the current market value implies that CNOOC real estate’s 22pe is only 4x, which is significantly lower than other central enterprise real estate ( China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) pe11x, Poly Developments And Holdings Group Co.Ltd(600048) pe7x), and there is a huge space for repair.
Under the new development mode of construction business, the infrastructure attribute is enhanced, and the operation quality is expected to be significantly improved. The historical valuation of the company has been significantly lower than that of other infrastructure construction central enterprises for a long time. We believe that the main reason is that the company’s housing construction revenue accounts for 60%, and the market is worried about the payment collection risk of residential construction business. Under the new development mode, the infrastructure attribute of the company’s construction business will continue to strengthen, which is mainly reflected in the following three aspects: 1) the industry will transform from the high-risk mode of “fast turnover and high leverage” to the stable mode of “competitive quality”. At the same time, the market share of developers of central enterprises and state-owned enterprises is expected to increase continuously, and the payment collection risk of residential construction business is expected to decrease significantly in the future. 2) Under the new model, it is emphasized to accelerate the construction of affordable housing and long-term rental housing. These owners are mainly government enterprises with stronger infrastructure attributes. The company has rich experience in the field of affordable housing and strong competitiveness. Relevant orders are expected to continue to grow rapidly in the future. 3) In the company’s housing construction business, government businesses such as industrial parks, urban renewal, area development, medical treatment, culture and municipal administration have increased significantly in recent years. The proportion of pure residential orders has decreased from 50% at the peak to 31% in the first three quarters of 21 years, and the business structure has been continuously optimized. With the enhancement of infrastructure attribute, the profitability of the company’s construction business is expected to be continuously improved in the future, the payment collection risk is expected to be significantly reduced, the operation quality will be significantly improved, and the valuation is expected to be close to infrastructure enterprises. The current share price of the company corresponds to a 22-year PE of 4.6x, and the PE of infrastructure central enterprises China Communications Construction Company Limited(601800) 22 years is 7.7x. There is a large repair space in comparison.
Investment suggestion: we predict that the company’s net profit attributable to the parent company in 21-23 years will be 49.5/54.1/58.7 billion yuan respectively, with a year-on-year increase of 10% / 9% / 9%, PE 5.0/4.6/4.2 times and Pb (LF) 0.78 times respectively, maintaining the “buy” rating.
Risk warning: some real estate enterprises have credit risk impact and regulatory policy change risk
