\u3000\u3 China Vanke Co.Ltd(000002) 244 Hangzhou Binjiang Real Estate Group Co.Ltd(002244) )
Matters:
Hangzhou Binjiang Real Estate Group Co.Ltd(002244) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the revenue was 37.98 billion yuan, with a year-on-year increase of 32.8%, and the net profit attributable to the parent company was 3.03 billion yuan, with a year-on-year increase of 30.1%. It is planned to distribute a cash dividend of 2.26 yuan (including tax) for every 10 shares; In the first quarter of 2022, the revenue was 6.18 billion yuan, a year-on-year decrease of 16.8%, and the net profit attributable to the parent company was 230 million yuan, a year-on-year decrease of 42.7%.
Ping An View:
The company’s annual revenue and profit increased by more than 30% year-on-year, and its sales reached a record high in 2021. In 2021, the company’s revenue and profit increased by more than 30% year-on-year, and the annual sales were 169.1 billion yuan, with a year-on-year increase of 24%, ranking 22nd in Kerui’s list and top 1 in Hangzhou. Affected by the rhythm of settlement, the performance of 2022q1 has declined. However, by the end of 2021, the company still had unsettled advance payment of 93.54 billion yuan, an increase of 28.5% over the beginning of 2021. The continuous thickening of advance payment provides guarantee for future performance.
Financial advantages have expanded, and financing costs have continued to decline: by the end of 2021, the company’s asset liability ratio after deducting advance receipts was 65.92%, net debt ratio was 65.97%, cash short debt ratio was 1.51 times, and the three red lines have remained “green”; The comprehensive financing cost continues to decline. The average financing cost in 2021 is only 4.9%, down 0.3pct from 2020. The company is one of the few high-quality private enterprises that have successfully issued bonds in China since 2021h2. At the same time, since the beginning of 2022, the company has issued ultra short-term financing for many times, with the coupon rate controlled within 4%, and proposed the goal of reducing the financing interest rate to 4.7% in 2022. Under the current background of capital pressure in the industry, the financing advantage is expected to be further expanded, highlighting the strong credit and operation strength of the company.
Hangzhou local auction “scavenging” land acquisition, and the strength of “grain storage” against the trend is prominent: the company’s land acquisition sales amount ratio and area ratio in 2021 were 34.5% and 99.4% respectively, far exceeding the land acquisition sales ratio of top 50 real estate enterprises (amount ratio 20.8% and area ratio 35.8%). Especially after 2021h2, the industry funds were “forced internally and externally”. Binjiang accurately selected the time in the downturn of the local market and “grain storage” against the trend. According to the data of the central index Institute, About 62.5% of the company’s new land storage and construction surface in 2021 was achieved in the second half of the year. For example, the company paid close attention to the window period of the third centralized land supply in 2021 and the first batch of centralized land supply in 2022, and obtained 4 and 11 high-quality plots respectively, ranking first in the industry. By the end of 2021, about 60% of the company’s land reserves are located in Hangzhou, and 25% of the land reserves are located in the second and third tier cities with solid economic foundation in Zhejiang Province. The advantages of deep cultivation have been further expanded, which also provides a strong guarantee for the subsequent de industrialization.
Profit forecast: the company takes root in advantageous areas. Under the downturn of the real estate market and the trend of differentiation, the follow-up sales deconvolution has a reliable guarantee; At the same time, the company adheres to steady operation and fine management, has a good financial condition, is immune from frequent credit risk events in the industry, demonstrates its financing advantages and expansion strength against the trend, and is a leader of high-quality private enterprises. We believe that with the continuous adjustment of the industry and the withdrawal of some real estate enterprises, the company is expected to gradually expand its advantages in the “adverse market” by virtue of its steady operation, brand and financing advantages. The company raised the EPS forecast of the company from 2022 to 2023 by 1.14 yuan (formerly 1.04 yuan) and 1.29 yuan (formerly 1.21 yuan), and added the EPS forecast of 2024 by 1.42 yuan. The current share price corresponds to PE by 7.2 times, 6.4 times and 5.8 times respectively, maintaining the “recommended” rating.
Risk tips: 1) there is a risk of decline in the company’s gross profit margin: if the subsequent property market in Hangzhou is hot, or the land price is high and the price of new houses is strictly limited, the company’s land acquisition and settlement gross profit margin may be under pressure; 2) The risk that the land acquisition is not as strong as expected: if the follow-up land auction rules are adjusted or the local market fluctuates, the company’s expansion of land storage may be blocked, which will also restrict the growth of sales scale in the future; 3) The policy improvement is not as expected: affected by the credit events of real estate enterprises, the expectation of sales deregulation of cooperative development projects or the credit qualification of partners, if subsequent partners have credit risk events, it will also hinder the company’s sales deregulation.
