\u3000\u3000 China Vanke Co.Ltd(000002) China Vanke Co.Ltd(000002) )
Revenue grew steadily and profits recovered steadily
The growth rate of the company’s performance was slightly higher than expected. In the first quarter of 2022, the operating revenue was 62.67 billion (YoY + 0.6%), and the net profit attributable to the parent company was 1.43 billion (YoY + 10.6%); The gross profit margin, after tax gross profit margin and net profit margin attributable to the parent company were 18.9%, 15.0% and 2.3% respectively, compared with the same period last year (- 1.5pct, – 1.0pct and + 0.2pct). Among them, the gross profit margin of development business is 21.8%; Gross profit margin after tax is 17.1% (YoY + 1.0pct).
The settlement area of development business is 3.747 million m2; Contribution revenue of 49.34 billion (yoy-6.9%), dragging down the overall revenue growth of the company. The stabilization and recovery of net profit attributable to the parent company are mainly due to: 1) the increase of asset disposal income drives the net investment income + 7.3%; 2) The expenses are well controlled, and the expense rate is – 0.8pct to 9.5% year-on-year; 3) The income tax rate was -7.3pct year-on-year.
There are enough sold but not yet settled, so we should be cautious in taking land
Affected by the downturn of industry prosperity, the company achieved sales of 106.5 billion (yoy-40.7%) in the first quarter, sales area of 6.327 million square meters (yoy-42.7%), and average sales price of 16833 yuan / ㎡ (YoY + 3.6%). By the end of March, the area of sold and outstanding projects was 47.762 million m2, with the corresponding amount of 738.51 billion (YoY + 3.9%), which was 1.6 times of the operating revenue in 2021, the same as that at the beginning of the year, which can provide guarantee for the steady growth of performance in the next 1-2 years.
The company has sufficient land reserves. Under the balance of scale and cash flow during the reporting period, only 6 new projects were added to the development business, with a total planned construction area of 1458000 square meters (yoy-69.7%), with an investment sales ratio of 23.0%; The equity construction area is 1.12 million m2 (yoy-67.1%), accounting for 76.8% (YoY + 5.9pct).
The business expanded steadily and the revenue continued to grow
In the first quarter, the business market of everything cloud expanded steadily. Among the new projects of Vanke property, the third-party projects accounted for 67%, which was + 10PCT higher than the projects under management in 2021; All things liangxingxin obtained 4 super high-rise projects above 200 meters; All things Cloud City has added three urban service projects and five new streets.
The company’s logistics warehousing, rental housing and commercial business realized operating revenue of 870 million, 700 million and 2.11 billion respectively, with a year-on-year increase of + 39.0%, + 12.8% and + 17.6%. A new project for logistics and warehousing, with a leasable construction area of 54000 m2; More than 6000 newly expanded houses for rental housing; Yinli expanded a new asset light project, with a new management area of 160000 square meters.
Three red lines and green stalls, and the financing cost remains low
The company’s financial security. As of the end of March, the net debt ratio was 34.6%, the cash short debt ratio was 1.6, and the asset liability ratio was 69.5% (wind caliber), which remained at the green level.
Benefiting from the stable credit rating, the company’s financing is smooth and the cost remains low in the industry. In the first quarter, 8 billion yuan of 3-year medium-term notes were successfully issued, with a coupon rate range of 2.95% – 3.00%; Issued 1.99 billion yuan of corporate bonds, of which the coupon rate of 3-year bonds is 3.14% and that of 5-year bonds is 3.64%.
Investment suggestion: in the first quarter, the company’s profit returned to positive growth and diversified businesses continued to develop. In the medium and long term, as a leading real estate enterprise with good credit, the company has strong land acquisition ability and will benefit from the improvement of the competition pattern after the industry is cleared. We maintain the previous profit forecast. It is estimated that from 2022 to 2024, the company will achieve operating revenue of 497.2 billion, 558.5 billion and 621.6 billion, with a year-on-year increase of 10%, 12% and 11%; The net profits attributable to the parent company were 24.6 billion, 26.6 billion and 29.4 billion, with a year-on-year increase of 9%, 8% and 11%. At present, the local auction market rules are optimized, and the company has the advantage of land acquisition; In addition, the company’s measures such as equity repurchase and executive holdings increase are conducive to maintaining market confidence. The current share price of the company corresponds to 9.2 times of PE in 2022, maintaining the “buy” rating.
Risk warning: the tightening of regulation and control policies exceeds expectations, the change of double centralized transfer rules, the lag or delay of quoted data.
