The overall regulation of the real estate industry in 2021 has accelerated the differentiation between state-owned enterprises and private enterprises. Therefore, real estate development companies are classified by company nature this year
With the introduction of three red lines, loan concentration, centralized land supply and other regulatory policies, the supervision of superimposed pre-sale funds has been strengthened, and the cash flow situation of real estate enterprises has become very important. Under the influence of the credit crisis caused by the thunderstorm of some private enterprises, the financing capacity of state-owned enterprises and private enterprises has been significantly differentiated, and the decline of buyers’ trust in private enterprises has also led to further pressure on the sales of private enterprises. Therefore, this year, we classified the nature of real estate enterprises through state-owned enterprises / private enterprises, and studied the change trend of the real estate industry in 2021 through horizontal comparison.
From the overall situation, in 2021, the seven sample state-owned central enterprises achieved a revenue of 1311.5 billion yuan, a year-on-year increase of 21.1%; Five sample private enterprises achieved a revenue of 1096.2 billion yuan, a year-on-year increase of 19.5%. The high growth of revenue is mainly due to the high growth of sales in 17-18 years, while the settlement lags behind the sales for 2-3 years. Observing the historical data, we can find that: (1) the revenue growth of state-owned central enterprises is more stable, while private enterprises have greater volatility; (2) After 2020, the revenue growth of state-owned enterprises began to exceed that of private enterprises.
From the perspective of specific real estate enterprises, (1) the operating income of all sample real estate enterprises has increased, and the growth rate of most real estate enterprises is the same as that of the previous year, maintaining at about 15-30%. (2) The growth rate of real estate enterprises with higher income scale is lower, and the growth rate of real estate enterprises with lower income scale is relatively higher. (3) The revenue growth rate of Xuhui holding group, Greentown China and Midea real estate is higher than 50%, and the growth rate is higher than that of the previous year The growth rate of Seazen Holdings Co.Ltd(601155) and CDI group decreased significantly compared with the previous year, Seazen Holdings Co.Ltd(601155) from 69.5% to 15.6%, and CDI group from 146.8% to 25.0%.
From the overall situation, (1) affected by the high land price and price limit policies in 17-18 years, the after tax gross profit margin of state-owned enterprises and private enterprises has continued to decline since 2018; (2) The gross profit margin of state-owned enterprises has always been slightly higher than that of private enterprises, but since 2019, the difference between the gross profit margin of state-owned enterprises and private enterprises has narrowed to less than 0.6pct, which is almost the same at present. (3) In 2021, the average gross profit margin of the sample state-owned central enterprises was 18.3%, a year-on-year decrease of 2.5pct; The average gross profit margin of the sample private enterprises was 17.9%, down 2.4pct year-on-year. Since most of the high priced land acquired in 17-18 years has been settled, it is expected that the gross profit margin will bottom out in 23 years, and then slowly stabilize and recover with the recovery of the gross profit margin in 21 years.
From the perspective of specific real estate enterprises, the gross profit margin after tax of all sample real estate enterprises except China Construction Development International Group decreased year-on-year. The after tax gross profit margin of China Resources Land, Longhu group and China overseas development remains above 20%. Among them, the commercial gross profit margin of China Resources Land and Longhu group is relatively high, which has raised the overall gross profit margin level. The post tax gross profit margin of China Jinmao, China Construction Development International Group, green city China and country garden has fallen below 16.5%. In terms of the decline in 2021, the decline in China’s overseas development and China Vanke Co.Ltd(000002) is higher, more than 5pct.
Investment suggestions and risk tips
Investment suggestion: maintain the “overweight” rating of the real estate development sector.
The epidemic repeatedly affected the fundamentals, continued to promote policy relaxation, and maintained the “overweight” rating of the real estate development sector. We believe that this year is a large-scale policy easing cycle, which is a beta market. Real estate enterprises with good credit qualification, sufficient liquidity, sufficient soil reserves and high quality are the main choice. It is suggested to pay attention to: A shares Poly Developments And Holdings Group Co.Ltd(600048) , Hangzhou Binjiang Real Estate Group Co.Ltd(002244) , China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , Gemdale Corporation(600383) , Vanke A, Huafa Industrial Co.Ltd.Zhuhai(600325) , Jinke Property Group Co.Ltd(000656) , Seazen Holdings Co.Ltd(601155) ; H-share China overseas development, green city China, China Resources Land, Longhu group, China Jinmao, Xuhui holding group, China Overseas Hongyang. Property management: Country Garden service, China Resources Vientiane, green city service, poly property, Yongsheng life service, Jinke service, China Merchants Property Operation & Service Co.Ltd(001914) .
Risk tips:
(1) the speed of policy introduction and implementation are lower than expected. If the subsequent relaxation of demand side policies and the number of follow-up cities are less than expected, the sales area and sales price of new houses may continue to decline.
(2) the fundamentals continue to decline, causing a chain reaction. If the sales price continues to decline, it will significantly affect the expectations of buyers, trigger a vicious circle of oversupply caused by selling, and the payment collection of real estate enterprises will further deteriorate.
(3) the repeated impact of the epidemic exceeded expectations. If the epidemic continues and repeatedly leads to the closure of the city, new home sales will stagnate
