\u3000\u300 China Baoan Group Co.Ltd(000009) China Baoan Group Co.Ltd(000009) 0)
Matters:
The company released its annual report for 2021, with annual revenue of 23.27 billion yuan, a year-on-year increase of 35.9%; The net profit attributable to the parent company was 1.93 billion, with a year-on-year increase of 30.1%, which was at the middle level of performance forecast; The company plans to distribute a cash dividend of 3.3 yuan (including tax) for every 10 shares.
Ping An View:
The increase of real estate carry over and tax liquidation maintained a rapid growth in performance. The company’s annual revenue increased by 35.9% year-on-year, and the net profit attributable to the parent company increased by 30.1% year-on-year, mainly due to: 1) the increase in the carry over income of real estate business, and the revenue of comprehensive development sector increased by 42.2% year-on-year to 9.84 billion yuan during the period; 2) The tax liquidation of relevant real estate projects was completed, and the taxes and surcharges during the period decreased by 880 million yuan to 140 million yuan year-on-year. In addition, under the background of pressure on the fundamentals of the real estate market, the company accrued an impairment loss of 430 million yuan based on the principle of prudence, an increase of 320 million yuan year-on-year. The total value of contractual liabilities and advances received at the end of the period was 10.44 billion yuan, an increase of 109% year-on-year, laying a solid foundation for subsequent performance growth.
Real estate sales hit a record high, and comprehensive development improved efficiency and growth. During the period, the subscription, contract signing, payment collection and other indicators of Tianjian real estate group exceeded 10 billion, a record high. The annual sales amount was 15.88 billion yuan and the sales area was 383000 square meters, with a year-on-year increase of 121% and 63% respectively. Six projects such as Tianjiao Beilu cash sale unit and qianhaiyue Guifu were opened. During the period, the company innovated the comprehensive development mode and expanded the first regional overall planning project – the preliminary service project of overall planning of land preparation interests in Nanling village, so as to provide an important platform for industrial chain coordination. Dapeng huashuwei, Lingao new village urban renewal and non-agricultural land and other four external expansion projects establish a new mode of cooperation between state-owned enterprises and joint-stock companies. At present, the comprehensive development business mainly sells 20 projects, with a total capacity and construction area of 2.498 million square meters, a total carried forward of 1.234 million square meters and an outstanding construction area of 1.095 million square meters.
Urban construction has laid a solid foundation and urban services have taken advantage of the trend. During the period, the company added a number of PPP, EPC, agent construction, general contracting and other projects, 219 projects under construction, and the contract cost was 44.854 billion yuan, a year-on-year increase of 34.7%. Urban services include urban infrastructure management and maintenance services, shantytowns transformation services, commercial operation services and property services. During the period, 82 property management projects were added, covering an area of 4.4807 million square meters; Expand and implement 9 service shed reform projects and promote 3 main implementation projects; Luohu shed reconstruction project has successfully completed the selection of resettlement houses involving 8240 parties, and the preliminary service project of land preparation and benefit coordination in Nanling village is advancing in an orderly manner according to the progress, and the house declaration and registration rate has reached 98.92%; Undertake the maintenance of 1854 roads and 926 bridges, with a mileage of 2223 kilometers; 4466 facility maintenance roads, with a mileage of 3360 km; The tunnel has 50 single tunnels, with a total length of 56.1 km.
The net debt ratio decreased significantly and the debt remained stable. At the end of the period, the cash on hand of the company was 8.41 billion yuan, which was 183.1% of the total long-term and short-term liabilities due within one year. There was no worry about the pressure of short-term debt repayment; At the end of the period, the asset liability ratio excluding advance receipts was 74.0%, a year-on-year decrease of 0.9pct, and the net liability ratio was 42.9%, a year-on-year decrease of 28.4pct, maintaining the low level of the industry. The company broadened financing channels and reduced financing costs. In 2021, the credit scale increased by 16.7 billion yuan, the use of ultra short loans was 14.9 billion yuan, the rolling issuance of ultra short loans was 4.2 billion yuan, the issuance of perpetual bonds was 2.5 billion yuan, the issuance of commercial bills was 590 million yuan and factoring was 15 million yuan. The supply chain finance achieved a historic breakthrough.
Investment suggestion: considering that the number of projects to be carried forward such as Tianjian Tianjiao of the company is still large and the gross profit is considerable, the previous profit forecast is raised. It is estimated that the EPS in 20222023 will be 1.26 yuan and 1.45 yuan respectively, the original forecast will be 1.16 yuan and 1.28 yuan, and the new forecast in 2024 will be 1.63 yuan. The corresponding PE of the current stock price is 5.1 times, 4.5 times and 4.0 times respectively. The company adheres to the development strategy of “taking urban construction and urban services as the main body and investment and new business as the two wings”, and takes the three major events of “strengthening the scale, optimizing the profit and expanding the market value” as the general program. It focuses on key points, making up for weaknesses, strengthening the foundation and shaping the brand, and promotes the transformation and upgrading of the company. The total annual investment is planned to be no less than 6.231 billion yuan in 2022. In the short term, with the promotion and carry over of key projects, the company’s performance is expected to continue to grow. In the medium term, as the resource integration platform of Shenzhen construction engineering group, the future business model is expected to be transformed and upgraded, the incentive system is also continuously improved, and the “recommended” rating is maintained.
Risk tips: 1) at present, the fundamentals of the real estate industry are under pressure. If the demand release of subsequent industries is lower than expected, real estate enterprises generally exchange price for quantity, or bring the risk of asset impairment of the company; 2) If there is no significant improvement in the follow-up real estate fund side policy, the company may face the risk of capital pressure; 3) In the field of construction, the industry barrier is low, the competition is fierce, the price of raw materials rises, the labor supply is in short supply, and the labor cost rises rapidly, which puts great pressure on enterprises; 4) The planning adjustment and demolition schedule of the company’s urban renewal and reconstruction project are complex and uncontrollable, which may lead to the delay of the project development plan or shed reconstruction schedule, the increase of relevant costs and other risks.
