\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 668 China State Construction Engineering Corporation Limited(601668) )
Event: the company released the annual report of 2021. In 2021, the annual operating revenue was 189134 billion yuan, with a year-on-year increase of 17.1%, and the net profit attributable to shareholders was 51.41 billion yuan, with a year-on-year increase of 14.4%, eps1.1% 23 yuan.
The infrastructure business grew rapidly and the real estate business developed healthily. In 2021, the company achieved an operating revenue of 189134 billion yuan, a year-on-year increase of 17.1%,; The net profit attributable to shareholders of listed companies was 51.41 billion yuan, a year-on-year increase of 14.4%. In terms of business, in 2021, the company’s real estate construction business continued to maintain a leading position in the medium and high-end market, with a revenue of 1147.1 billion yuan, a year-on-year increase of 14.6%; The company’s infrastructure business was optimized and transformed, and its scale grew rapidly, realizing a revenue of 410 billion yuan, a year-on-year increase of 17.7%; The real estate business continued to develop healthily, with an operating revenue of 330.9 billion yuan, a year-on-year increase of 22%; The survey and design business realized an operating revenue of 10.8 billion yuan, a year-on-year increase of 2%; Affected by the epidemic, the company’s overseas business decreased by 0.4% year-on-year. In the fourth quarter, the company achieved a revenue of 554291 billion yuan, an increase of 2.85% over the same period last year; The net profit attributable to the parent company was 13.578 billion yuan, a year-on-year decrease of 2.53%, mainly due to the increase of impairment provision. Quarterly, the company achieved revenue and growth rate of 404730 billion yuan (+ 53.41%), 531986 billion yuan (+ 14.56%), 400332 billion yuan (+ 15.06%) and 554291 billion yuan (+ 2.85%) respectively in Q1 / Q2 / Q3 / Q4 in 2021.
Gross profit of housing construction and infrastructure construction increased significantly. In 2021, the company achieved a gross profit of 214.2 billion yuan, a year-on-year increase of 22.5%; The gross profit margin was 11.3%, an increase of 0.5 percentage points compared with the same period of last year. Among them, the gross profit margin of real estate construction, infrastructure construction, real estate and survey and design business was 7.8% / 10.4% / 21.1% / 21.1%, respectively + 1.1pp / + 1.9pp / – 5.1pp / – 3.1pp year-on-year. The gross profit of real estate construction and infrastructure construction increased significantly and improved the overall gross profit margin. In 2021, the company’s period expense rate was 4.9%, up 0.7 percentage points year-on-year, mainly due to the increase in advertising investment in the pre-sale period of the real estate business and the increase in management activities and capital demand caused by the expansion of business scale. The company’s net cash inflow from operating activities was 14.4 billion yuan, a year-on-year decrease of 5.9 billion yuan, mainly due to the increase of project funds, real estate development funds and purchase funds paid in the current period. In 2021, the company accrued credit impairment loss of 9.21 billion yuan and asset impairment loss of 3.42 billion yuan, resulting in a decrease of 12.63 billion yuan in the total profit of the consolidated statements. The dividend proportion of the company continued to increase, with a dividend of 2.5 yuan per ten shares. In 2021, the dividend proportion was 20.40% and the dividend rate was 4.1%. The company’s asset liability ratio was 73.2%, with a year-on-year decrease of 0.5pp, showing a downward trend year by year.
There are abundant orders in hand, and the proportion of infrastructure business has increased year by year. In 2021, the company signed 3.5 trillion yuan of contracts, with a year-on-year increase of 10.3%, including 2.3 trillion yuan of newly signed contracts in housing construction business, with a year-on-year increase of 8.3%, and 0.8 trillion yuan of newly signed contracts in infrastructure business, with a year-on-year increase of 24.1%. From the perspective of construction business structure, the proportion of newly signed orders of capital construction business is 18% / 21% / 23% respectively. The capital construction attribute of construction business is enhanced year by year, and the continuous optimization of business structure leads to the decline of payment collection risk.
The real estate business adheres to steady, sustainable and high-quality development, and its competitive advantage is expected to expand. In 2021, the newly purchased land reserve area of the company was 18.42 million square meters. By the end of the period, the company had 103.95 million square meters of land reserve, with abundant land reserves in hand. The first-line real estate inventory and provincial capital cities accounted for more than 70%. In the context of the contraction of the real estate industry, the company’s CNOOC real estate terminal has actively adjusted its business strategy. While strengthening the in-depth development of national strategic regions such as Dawan District, Yangtze River Delta and Beijing Tianjin Hebei, it has accelerated the formation of a business pattern dominated by residential product development, supplemented by high-quality commercial development and operation, supplemented by emerging businesses such as education and health care; CSCEC real estate accelerated the de commercialization of sales and enriched the ways and means of land acquisition. At present, the supply side reform of the real estate industry is accelerating, and the company’s high-quality business strategy is expected to further expand its competitive advantage.
Profit forecast and investment suggestions. It is estimated that the company’s EPS from 2022 to 2024 will be 1.4 yuan, 1.57 yuan and 1.75 yuan respectively, and the corresponding PE will be 4.3, 3.9 and 3.5 times respectively. Give the company 6 times PE for 2022 performance, corresponding to the target price of 8.40 yuan, and give a “buy” rating for the first time.
Risk tips: macroeconomic downside risk, real estate policy change risk, infrastructure investment less than expected risk.
