\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 155 Seazen Holdings Co.Ltd(601155) )
Matters:
The company announced the first quarterly report of 2022, with a revenue of 18.68 billion, a year-on-year increase of 5.9%; The net profit attributable to the parent company was 510 million, a year-on-year decrease of 5.9%.
Ping An View:
The performance decreased slightly year-on-year, and the outstanding resources are still sufficient. The company’s revenue in the first quarter increased by 5.9% year-on-year, and the net profit attributable to the parent decreased by 5.9% year-on-year. The growth rate of net profit was lower than that of revenue mainly because: 1) the gross profit margin decreased by 1.3pct to 19.1% year-on-year due to the rise of land price and the government price limit; 2) Due to the investment loss caused by the disposal of subsidiaries, the net investment income during the period was – 63 million yuan, compared with 156 million yuan in the same period of last year; 3) The payment of enterprise income tax increased year-on-year. During the period, the company’s operation remained efficient, and the expense rate decreased by 0.1pct to 11.9% year-on-year. In addition, there was no provision for asset impairment. The total value of contract liabilities and advances received at the end of the period increased by 5.2% to 204.27 billion yuan compared with the beginning of the period, 1.2 times the revenue in 2021, and the open resources are still sufficient.
Sales fell due to many factors, and investment remained cautious. Affected by the repeated epidemic situation, the downturn of the real estate market and the promotion rhythm, the sales amount of the company in the first quarter was 31.06 billion yuan, a year-on-year decrease of 37.4%, and the sales area was 3.149 million square meters, a year-on-year decrease of 38.3%; The average selling price was 9864 yuan / square meter, with a year-on-year increase of 1.4%. Under the pressure of the real estate market, the company maintained cautious operation and did not add new land during the period, but there are still many soil storage resources. By the end of 2021, the company had a total land reserve of 138 million square meters, which can meet the needs of development and operation in the next 2-3 years. It is mainly distributed in the areas with the most economic vitality and the highest population density. Among them, the first and second tier cities account for about 37% of the total land reserve, and the third and fourth tier cities in the Yangtze River Delta account for about 30% of the total land reserve.
Commercial real estate is developing well, and the territory of “100 cities and 100 stores” continues to expand. Despite the impact of the epidemic, the company’s real estate rental income in the first quarter was 2.25 billion yuan, a year-on-year increase of 24.9%. At the end of the period, the number of leased properties reached 126, with a total construction area of 11.83 million square meters and a rental area of 7.126 million square meters, with a rental rate of 96%. In 2022, the company plans to realize a total commercial income of 10.5 billion yuan, newly opened Wuyue Plaza and 25 entrusted projects in operation.
The financial position is sound and the scale of interest bearing liabilities is reduced. At the end of the period, the company’s cash on hand was 43.42 billion, which was 217.4% of short-term liabilities (short-term borrowing + long-term debt due within one year), and there was little pressure on short-term debt repayment; The net debt ratio and the asset liability ratio excluding advances received were 43.9% and 70.4%. The net debt ratio remained low, with interest bearing liabilities of 85.34 billion yuan, a decrease of 11.1% over the beginning of the year. In the first quarter, the company has repaid 4.63 billion yuan of domestic and foreign open market bonds. With the company actively reducing debt leverage, the three red line indicators are expected to return to the “green gear”. At the end of the period, the total interest bearing liabilities of the company’s joint ventures amounted to 9.911 billion yuan.
Investment suggestion: maintain the company’s profit forecast. It is estimated that the EPS from 2022 to 2024 will be 5.59 yuan, 5.65 yuan and 5.68 yuan respectively, and the corresponding PE of the current stock price will be 5.0 times, 4.9 times and 4.9 times respectively. Under the pressure of the real estate market, the policy side is expected to continue to improve and boost the valuation of the real estate sector. At the same time, the company has stable debt, smooth financing, excellent development and operation strength and good development of commercial real estate. Driven by two wheels, we are optimistic about the future development of the company and maintain the “recommended” rating.
Risk tips: 1) there is great downward pressure on the property market in the near future. If the follow-up policy improvement is less than expected, it may affect the future scale growth of the company and bring the risk of project impairment; 2) Due to the rise of land price and sales price limit, the company’s gross profit margin will still face the risk of decline in the future; 3) Under the background of frequent credit events of individual real estate enterprises, if the financing environment of subsequent industries does not ease significantly, the company’s capital situation may face pressure.
