\u3000\u3000 China Vanke Co.Ltd(000002) China Vanke Co.Ltd(000002) )
Events
On April 28, 2022, China Vanke Co.Ltd(000002) released the first quarterly report of 2022. In the first quarter of 2022, the operating revenue was 62.67 billion yuan, 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%.
Comments
The revenue remained stable, and the net profit attributable to the parent company slightly exceeded expectations. In terms of revenue, in the first quarter of 2022, the settlement area of the company’s development business was 3.747 million m3, flat year-on-year, contributing an operating revenue of 49.34 billion yuan, a year-on-year decrease of 6.9%; Diversified business and other revenue contributed 13.33 billion yuan (accounting for 21.3% of revenue), with a year-on-year increase of 44.0%. In terms of profit, the overall gross profit margin of the company in the first quarter of 2022 was 18.9%, down 2.9pct compared with the whole year of 2021, while the gross profit margin of development business was 21.8%, 0.1pct higher than the whole year of 2021; The year-on-year increase in net profit attributable to the parent company is mainly due to: ① non recurring profit and loss (mainly from asset disposal) increased by 200 million yuan year-on-year; ② Income tax expenses decreased by 310 million yuan year-on-year.
The sales scale declined year-on-year, and the sold and outstanding resources were sufficient. In the first quarter of 2022, the company’s sales amount was 106.5 billion yuan, ranking the second in the industry, with a year-on-year decrease of – 41%, lower than the 47% decline of Kerui’s top 100 real estate enterprises. By the end of the first quarter, the sold and outstanding area within the consolidation scope of the company had reached 47.76 million m3, and the contract amount was 738.5 billion yuan, an increase of 3.9% over the end of 2021, which was 1.7 times the operating income of the development business in 2021, which was enough to support the stable growth of the operating income of the company in the next two years.
The newly started area declined and the completed area remained the same in the same period. Based on the changes of market environment, the company plans to start new construction of 19.2 million m3 in 2022, a year-on-year increase of – 39.0%, and the new construction area of 5.99 million m3 in the first quarter, a year-on-year increase of – 25.5%, accounting for 31.2% of the annual construction plan (25.6% in the same period of 2021); The completed area was 3.1 million m3, a year-on-year increase of + 0.2%, accounting for 8.0% of the annual completion plan (8.6% in the same period in 2021).
The three red lines maintain the green gear, and the debt repayment pressure is small. In the first quarter of 2022, the company’s asset liability ratio excluding advance receipts was 68.1%, the net debt ratio was 34.6%, and the cash short debt ratio was 1.6, maintaining the green level; There is an interest repayment pressure of RMB 54.6 billion, which is less than one time that of RMB 14.4 billion within one year.
Investment advice
The gross profit margin of the company’s development has stabilized and the contribution of diversified businesses has increased. We expect the company’s performance to return to a stable growth trend and maintain the profit forecast unchanged. The net profit attributable to the parent company in 202224 will be 23.18 billion yuan, 25.01 billion yuan and 27.02 billion yuan respectively, with a year-on-year growth rate of 2.9%, 7.9% and 8.0% respectively. Maintain the target price of 20.34 yuan / share, corresponding to 10.2x, 9.5x and 8.8x PE in 202224, and maintain the “overweight” rating.
Risk tips
Loose policy regulation is less than expected; The spread of the epidemic affects market confidence; Gross profit margin continued to decline
