\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 325 Huafa Industrial Co.Ltd.Zhuhai(600325) )
The background endowment of state-owned assets is excellent, and there is great potential for resource synergy. The largest shareholder of the company is HUAFA group controlled by Zhuhai SASAC, with a shareholding of 26.51%. In addition, the top ten shareholders hold a total of 14.87%, with scattered equity and stable control. With the background of state-owned assets, major shareholders have deeply participated in the urban development of Zhuhai, with rich land reserves, and publicly promised that the land resources in their hands will be developed by Listed Companies in the future, and rich resources can be coordinated with listed companies.
Years of deep cultivation have yielded results, and sales have reached a new level. The company adheres to the strategy of urban deep cultivation, expands its area with points, and has a solid leading position in Zhuhai, its base. In 2021, the sales of East China region reached 55.320 billion yuan, accounting for 45.38%; The annual sales of South China reached 23.33 billion yuan, accounting for 19.14%, and the performance contribution of deep cultivation area continued to grow. At the same time, years of deep cultivation have created unique advantages. From the supply side and demand side, the company is in an advantageous position. In the future, the withdrawal of small and medium-sized real estate enterprises and out of danger real estate enterprises will bring great performance improvement to the company.
Land acquisition focuses on key areas and diversified means help improve profitability. Adhering to the strategic focus, the company has focused on the deep cultivation of urban agglomerations in the past two years and increased the proportion of land acquisition in first and second tier cities; Set production according to sales and ensure the rhythm of supply. Combined with public market bidding, auction and listing, closed market acquisition, M & A, old reform and obtaining high-quality plots through major shareholders, the company has rich sources of land reserves. In addition, non-public land acquisition can avoid competition at present, which is conducive to the company to obtain high-quality soil storage at a better price and ensure the profit of the project. At the same time, M & A loans and other policy tools are in line with the company’s demands, which will greatly help the company overtake in corners.
Ingenuity, quality, establish long-term advantages, and build a unique moat through financing channels. The company’s “excellent +” product body has iterated to 4.0. The five product lines of future Department, City Department, Four Seasons Department, government department and top department meet the buyers with different needs and establish the competitive advantage of the company’s product power. In terms of financing, the company raised funds by means of medium-term notes, REITs of long-term rental apartments and ABS of supply chain, making full use of the background of state-owned assets, with smooth channels and diversified means. The financing cost decreased significantly from 9.55% in 2014 to 5.80% in 2021, and there is still room for further decline in the future.
The improvement of management leads to the improvement of profitability, and one core and two wings open up space for the future. Through cost control, digital governance and other means, the company has opened up the whole management process of the company. From 2014 to 2021, the sales expense rate and management expense rate based on the contract sales amount decreased from 2.8% and 3.99% to 1.30% and 1.25% respectively, the inventory turnover rate increased from 0.12 to 0.18, and the guarantee ratio of advance collection / sales revenue increased from 0.72 to 1.24. The management effect continued to be released, driving the improvement of future performance. At the same time, the company insists on promoting relevant diversification. At present, it has achieved good results and will become a new growth pole in the future.
It is estimated that the company’s EPS from 2022 to 2024 will be 1.66/1.81/2.03 yuan / share. With the company’s previous sales projects successively entering the settlement cycle, other businesses remain stable, and the company’s revenue scale is expected to increase. For the first time, the company is given a buy rating, with a target price of 12.79 yuan / share.
Risk factors: the tightening or relaxation of real estate regulation and control policies is less than expected, the decline of sales in the real estate industry is more than expected, and the expansion of the company’s real estate development business and other businesses is less than expected
