\u3000\u3000 China Vanke Co.Ltd(000002) China Vanke Co.Ltd(000002) )
Matters:
The company announced the first quarter report of 2022, and realized an operating revenue of 62.67 billion yuan in the first quarter, with a year-on-year increase of 0.6%; The net profit attributable to the parent company was 1.43 billion yuan, a year-on-year increase of 10.6%.
Ping An View:
Steady growth in performance and efficiency improvement in operation and management. The company’s net profit attributable to the parent company in the first quarter increased by 10.6% year-on-year, which was higher than the growth rate of revenue. The main reason was that although the gross profit margin during the period decreased by 1.5pct to 18.9% year-on-year due to the rise of land price and price limit (including the gross profit margin before tax of development business was 21.8%), the company’s operation was further improved during the period, and the expense rate during the period decreased by 0.8pct to 9.5% year-on-year, which was superimposed with the decrease of corporate income tax, driving the steady growth of profit.
Sales fell year-on-year, with sufficient open resources. Affected by the repeated epidemic, the downturn of the real estate market and the rhythm of promotion, the company achieved a sales area of 6.327 million square meters and a contract sales amount of 106.5 billion yuan in the first quarter, a year-on-year decrease of 42.7% and 40.7% respectively; The average sales price was 16833 yuan / square meter, an increase of 2.1% over the whole year of 2021. During the period, the settlement area of real estate was 3.747 million square meters, flat year-on-year; The operating revenue was 49.34 billion yuan, a year-on-year decrease of 6.9%. As the sales scale is much larger than the settlement scale, the open area of sold resources within the scope of the consolidated statements at the end of the period is 47.762 million square meters, and the contract amount is 738.51 billion yuan, an increase of 2.2% and 3.9% respectively compared with the beginning of the period. Sufficient open resources lay the foundation for the growth of annual performance.
Be cautious in land acquisition, and the decline in construction may affect the available supply. During the period, 1.46 million square meters of land storage planning construction area was added, with a total amount of 17.4 billion yuan. The ratio of land acquisition sales area and land acquisition sales amount were 23.1% and 16.3% respectively, lower than that in 2021 (70.1% and 29.5%), but the equity of construction area accounted for 77%, an increase of 5.9pct compared with that in 2021. The new construction area in the same period of the year is 5.96 million, accounting for a certain 25.95% of the planned construction area in the same period of the whole year, accounting for 5.92 million in the same period of the year; It is planned to be completed in the same period of 2024 (an increase of 8.16% year-on-year, accounting for 2.01% year-on-year).
Maintain the “green file” level and smooth financing channels. The net debt ratio of the company at the end of the period was 34.6%, maintaining a low level in the industry; Monetary capital was 141.78 billion yuan, and the coverage of short-term loans and interest bearing liabilities due within one year was 2.6 times, an increase of 0.1 times over the beginning of the year; After excluding advance receipts, the asset liability ratio is 69.5%, the “three red lines” remain green, and the international credit rating is stable. During the period, the issuance of 8 billion yuan of 3-year medium-term notes was completed in three times, and the coupon rate range was only 2.95% – 3.00%; The total amount of corporate bonds issued was 1.99 billion yuan, of which the coupon rate of three-year varieties was 3.14% and that of five-year varieties was 3.64%.
Diversified businesses continued to develop well. During the period, all things cloud maintained steady market expansion. Among the new Vanke property projects belonging to community space services, projects from independent third-party property developers accounted for 67%. Logistics warehousing business (including non consolidated items) achieved a revenue of 870 million yuan, a year-on-year increase of 39%; A new project has been obtained for logistics warehousing business, with a leased building area of 54000 square meters; Newly opened 4 high-standard warehouse projects and 5 cold chain park projects, with a leased construction area of 392000 square meters. The rental housing business (including non consolidated projects) achieved a revenue of 700 million yuan, a year-on-year increase of 12.8%. The rental housing business has newly expanded more than 6000 houses. The business development and operation business achieved a revenue of 2.11 billion yuan (including non consolidated income), with a year-on-year increase of 17.6%. Yinli expanded a new asset light project (Shanghai Senlan impression city project), with a new management area of 160000 square meters.
Investment suggestion: maintain the previous profit forecast. It is estimated that the EPS of the company from 2022 to 2024 will be 2.03 yuan, 2.15 yuan and 2.33 yuan respectively, and the corresponding PE of the current stock price will be 9.2 times, 8.7 times and 8.0 times respectively. In the short term, the pressure on the property market remains, and the follow-up policies are expected to continue to improve and boost the valuation of the sector; In the medium and long term, with the forced liquidation of some radical real estate enterprises and the gradual improvement of the industry pattern, the profit margin is expected to stabilize and repair, while the company’s financing control and brand advantages are prominent. The genes of steady operation and being vigilant in times of peace are more in line with the future development trend of the industry. At the same time, the diversified layout opens up new growth space, which is expected to further expand the leading edge of the industry and maintain the “recommended” rating.
Risk tips: 1) at present, the fundamentals of the industry are facing downward pressure. If the improvement of policies and the introduction time are lower than expected, it may affect the future growth of the company’s scale and bring the risk of project impairment; 2) Due to the rise of price limit and land price, the gross profit margin of subsequent companies still faces the risk of decline; 3) The company’s diversified business development has less than expected risks.
