\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 048 Poly Developments And Holdings Group Co.Ltd(600048) )
Key investment points
Revenue grew steadily, and the decline of gross profit margin dragged down profits
In 2021, the company realized operating revenue of 285024 million (YoY + 17.19%), and net profit attributable to parent company of 27.388 billion (yoy-5.39%); The gross profit margin and net profit margin attributable to the parent company were 26.8% and 9.6% respectively, down 5.8pct and 2.3pct compared with the same period last year.
Affected by the downward trend of the overall profit margin of the industry, the gross profit margin of the company decreased slightly, and the increase of income did not increase profit. With the continuous carry over of high land price projects, the short-term gross profit margin of the company will still be under pressure; However, under the refined management, the cost rate of the company is controlled stably, which is 0.23pct lower than that in 2020. Horizontally, the gross profit margin is still at a high level in the industry.
Sales increased against the trend, and the results of urban deep cultivation showed
In 2021, the company achieved a contract amount of 534.93 billion (YoY + 6.38%), a contract area of 33.33 million m2 (yoy-2.23%), and the average sales price of 16049 yuan / m2 (YoY + 8.81%). The increase of sales amount was mainly driven by the increase of average price.
The company’s regional deep ploughing effect is remarkable, and the sales of 38 core cities account for 78% (YoY + 3PCT); The total sales of the Pearl River Delta and Yangtze River Delta account for 53% (YoY + 1PCT). The number of cities with 10 billion contracts in a single city increased by 2 to 17 compared with 2020, with a total sales contribution of more than 340 billion.
Maintain investment concentration and replenish high-quality soil storage at the right time
The company added 145 projects in total throughout the year, with a new capacity building area of 27.22 million m2 (yoy-15%) and a land acquisition amount of 185.7 billion (yoy-21%), of which the development funds of the Pearl River Delta and Yangtze River Delta accounted for 54% (YoY + 7pct).
Benefiting from the steady and rational business style, the company chooses the time to obtain high-quality plots with low premium rate in high-energy cities in the second and third rounds of centralized land supply with reduced heat. In 2021, the average floor price of the company was 6821 yuan / m2 (yoy-8%), accounting for 42.5% (yoy-7.6pct) of the average sales price of the year. Under the background of optimization of centralized land supply rules in 2022, the company, as a leading central enterprise, will continue to have the opportunity to supplement land storage at low prices. We believe that the drag of the company’s high land price project on the gross profit margin at the statement level will be exhausted in 2023, and then the profit margin will stabilize and recover.
The cash flow is sufficient and safe, and the financing cost continues to decrease
The company has abundant cash flow, with a sales return of 502 billion yuan in 2021 and a return rate of 93.8%, maintaining a high level in the industry. The company has smooth financing channels. In 2021, it issued corporate bonds of 8.69 billion yuan and medium-term notes of 10 billion yuan, with a total interest bearing liability of 338.2 billion yuan and a comprehensive financing cost of 4.46% (yoy-31bp).
In the process of accelerating the liquidation of the industry, the company’s financial security and three red lines maintain the green file; Superimposed with the brand endorsement of central enterprises, the financing advantage is significant. We believe that the industry-leading financing capacity is conducive to the company actively replenishing high-quality reserves, so as to further improve the market share.
Profit forecast and investment suggestions
Under the background of increasing industry concentration, thanks to the improvement of competition pattern, the company, as a leading central enterprise, has expanded its leading advantages in financing and land acquisition, and its long-term competitiveness is remarkable.
Due to the decline in the gross profit margin of the industry as a whole, we expect the company to achieve operating revenue of 323.6 billion, 363.5 billion and 403.1 billion from 2022 to 2024 (324.8 billion and 352.5 billion before 2022 and 2023), with a year-on-year increase of 13.6%, 12.3% and 10.9%, and realize net profits attributable to the parent company of 28.6 billion, 30.4 billion and 32.7 billion (35.1 billion and 38.2 billion before 2022 and 2023), with a year-on-year increase of 4%, 6.5% and 7.4%. The company’s current share price corresponds to 7.3 times of 2022 performance, maintaining the “buy” rating.
Risk warning events: the tightening of financing environment exceeds expectations, the tightening of real estate regulation policies exceeds expectations, the change of double centralized transfer rules, the lag or delay of quoted data.
