\u3000\u3 Ping An Bank Co.Ltd(000001) 979 China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) )
Events
On April 28, 2022, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) released the first quarterly report of 2022. In the first quarter of 2021, the operating revenue was 18.8 billion yuan, a year-on-year increase of + 48.4%; The net profit attributable to the parent company was 444 million yuan, a year-on-year increase of – 33.7%.
Comments
The decline in gross profit margin led to the decline in net profit attributable to the parent company. In the first quarter of 2022, the area of real estate projects completed, delivered and carried forward by the company increased, and the carried forward revenue increased. Therefore, the operating revenue achieved a large increase, while the net profit attributable to the parent decreased year-on-year, mainly because: ① affected by the continuous downturn of the real estate industry, the company’s carried forward gross profit margin was 21.95%, down 3.52 PCT compared with the whole year of 2021; ② The company’s investment income and long-term equity investment disposal income decreased. The investment income in the first quarter of 2022 was 69 million yuan, a year-on-year decrease of 82%. Recently, favorable policies for real estate regulation have been intensively introduced. It is expected that the regulation will be loose throughout 2022, and the market sales will gradually stabilize. At the same time, the land profit space obtained by the company in the second half of 2021 and the first quarter of 2022, when the local auction competition is relatively relaxed, is relatively high, and the gross profit margin of the company is expected to gradually stabilize and repair.
Although the sales scale declined year-on-year, the industry ranking rose steadily. The contracted sales amount of the company in the first quarter of 2022 was 47.3 billion yuan, a year-on-year increase of – 34.5%, which was less than the decline of Kerui’s top 100 real estate enterprises (- 47.1%), and none of the top 30 real estate enterprises was positive year-on-year; The industry ranks No. 6, up 1 place compared with the whole year of 2021.
Investment is based on sales, and cash safety comes first. In the first quarter of 2022, the company acquired 6 land in cities in the Yangtze River Delta and Pearl River Delta such as Hefei, Ningbo and Foshan, with an equity investment amount of 4.4 billion yuan, a year-on-year increase of – 84%. The investment intensity decreased under the condition of relatively low sales, so as to ensure the safety of the company’s cash flow. The company is the first real estate enterprise to obtain M & a loan financing. At present, there are great opportunities for M & A in the market, and it is expected to obtain high-quality projects through M & A channels in the future.
The scale to be carried forward increased steadily, supporting the growth of the company’s performance. By the end of the first quarter of 2022, the company’s contractual liabilities (amount to be carried forward in consolidated statements) had reached 162.3 billion yuan, an increase of 9.2% over the end of 2021, which will support the steady growth of the company’s annual performance.
Investment advice
We expect that the annual sales scale of the company will remain stable and the profit forecast will remain unchanged. The net profit attributable to the parent company in 202224 will be 10.84 billion yuan, 12.97 billion yuan and 15.7 billion yuan respectively, with a year-on-year growth rate of 4.5%, 19.6% and 21.0% respectively. Considering that the company will benefit from the policy support for the project acquisition and merger of real estate enterprises, the target price is raised to 17.79 yuan / share, corresponding to 13.0x, 10.9x and 9.0x PE in 202224 respectively, maintaining the “buy” rating.
Risk tips
The implementation of real estate easing policy is less than expected; The epidemic situation continues to inhibit the release of demand; Other real estate enterprises frequently default
