\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 048 Poly Developments And Holdings Group Co.Ltd(600048) )
Core view
The profit margin follows the decline of the market and is rich in settleable resources. In 2021, the company achieved an operating revenue of 284.9 billion yuan, a year-on-year increase of 17.2%; The net profit attributable to the parent company was 27.39 billion yuan, a year-on-year decrease of 5.4%. The company’s increase in income without increase in profit is mainly due to the decline in the profitability of carry over projects. The annual gross profit margin in 2021 was 26.8%, a year-on-year decrease of 5.8 percentage points; The net interest rate was 13.1%, down 3.4 percentage points year-on-year. Although the company’s profit margin decreases with the industry, it is still at a high level in the industry. At the end of 2021, the company’s advance receipts were 416.9 billion yuan, a year-on-year increase of 13.7%, corresponding to 1.6 times of the revenue of real estate development business. The guarantee of future performance is still relatively high over the years. From the perspective of resources that can be carried forward, the company plans to complete an area of 42.31 million m3 in 2022, with a year-on-year increase of 5.8%. In general, the company’s revenue scale will still maintain steady growth, but the carry forward of some low gross profit projects is expected to still drag down the growth of net profit.
The sales ranking continues to improve and adhere to the strategy of urban deep cultivation. In 2021, the company achieved a sales amount of 534.9 billion yuan, a year-on-year increase of 6.4%; The sales area was 33.33 million square meters, a year-on-year decrease of 2.2%; The average sales price was 16049 yuan / flat, a year-on-year increase of 8.8%. The company continued to adhere to the strategy of urban deep cultivation, and the sales of core 38 cities accounted for 78%, with a year-on-year increase of 3 percentage points; The total contracted sales in the Pearl River Delta and Yangtze River Delta exceeded 280 billion, accounting for 53% of the total sales. There are 17 cities that have signed 10 billion contracts in a single city, an increase of 2 compared with 2020, with a total sales contribution of more than 340 billion yuan. The effect of urban deep cultivation is remarkable. The annual sales collection rate of the company reached 93.8%, the collection rate remained above 93% for three consecutive years, and the operating cash flow has been positive for four consecutive years. In the first quarter, the company achieved contracted sales of 90.7 billion yuan, a year-on-year decrease of 27%, which was lower than the industry average. The industry ranking was further improved to the third place, and the market share of the whole year is expected to continue to increase.
Investment accurately grasped the market window, and the cost of land acquisition decreased. In 2021, the company added 27.22 million square meters of construction area, a year-on-year decrease of 14.6%; The total land price was 185.7 billion yuan, a year-on-year decrease of 21%. In terms of investment rhythm, the company did not chase high and follow blindly in the first batch of land supply with fierce competition. When the heat of the second and third batches of land supply decreased and the market returned to rationality, the company quickly increased investment and obtained high-quality plots with low premium rates such as Guangzhou, Nanjing and Xiamen. The average land acquisition price of the company throughout the year was 6822 yuan / Ping, a year-on-year decrease of 7.6%. The ratio of land price to house price was 42.5%, a year-on-year decrease of 7.6 percentage points, and the land acquisition intensity (land acquisition amount / sales amount) was 34.7%, a year-on-year decrease of 12.1 percentage points. In 2021, the company focused on high-quality areas with high contribution to replenishment sales. The total amount of land acquisition in the Pearl River Delta and Yangtze River Delta accounted for 54% of the new resources in the whole year, an increase of 7 percentage points over 2020. While capturing the market window, the company further guaranteed the quality of expansion.
Under the background of strong credit, the financing advantages are highlighted, and the financing cost continues to decline. At the end of 2021, the scale of interest bearing liabilities of the company was 338.2 billion yuan, of which the proportion of liabilities due within one year decreased by 2.7 percentage points to 19.1%, and the debt structure became more reasonable. After deducting the three indicators of short-term debt (+ 1.04% of 5pc-7t), the net debt ratio of each asset is further optimized, with the ratio of short-term debt (+ 1.0% of 5pc-1.04%), which is lower than that of the three indicators of short-term debt (+ 1.04%). Under the background of tightening the industry financing environment and expanding the credit interest margin of real estate enterprises, the company made full use of the background of central enterprises to seize low-cost resources. In 2021, the company issued corporate bonds of 8.69 billion yuan and medium-term notes of 10 billion yuan, and the comprehensive financing cost of the whole year was 4.46%, a year-on-year decrease of 31 basis points.
Investment suggestion: the company adheres to the deep cultivation strategy of “core city + Urban Agglomeration”, the sales growth in the market downturn period is better than the industry average level, and the industry position is rising steadily. At the same time, the investment side has always maintained its concentration. The accurate grasp of the land acquisition cycle is conducive to the stabilization and rebound of future profitability, and the continuous improvement of financing level under the credit endorsement of central enterprises. In the medium and long term, it is expected to become the head real estate enterprise that most benefits from the change of industry pattern. We predict that the company’s EPS will be 2.38 yuan / 2.5 yuan / 2.7 yuan / share from 2022 to 2024, and the corresponding PE will be 7.3 / 7.0 / 6.4 times respectively, maintaining the “buy” rating.
Risk warning: the marginal improvement of policy is less than expected, the de commercialization of sales is less than expected, the impairment risk of high price in the early stage, etc.
