\u3000\u3000 Hangzhou Binjiang Real Estate Group Co.Ltd(002244) (002244)
Key investment points
Recommendation logic: 1) the sales amount has increased rapidly, ranking No. 22, and the product quality premium is excellent. 2) Actively take land and abundant soil reserves, focus on the steady development of Zhejiang and Hangzhou, and make outstanding contributions to the core cities. The company focuses on Hangzhou, deeply cultivates Zhejiang, and steadily expands in East China. 3) The three red lines remain green, with diversified financing channels, and the financing cost continues to decline. The average financing cost is 4.9%, with strong development momentum.
The operating performance has increased rapidly, and the finance is stable and well developed. In 2021q1-3, the company achieved an operating revenue of 24.44 billion yuan, a year-on-year increase of 89.4%; The net profit attributable to the parent company was 1.32 billion yuan, a year-on-year increase of 49.1%. By the end of the third quarter of 2021, the company’s contractual liabilities were RMB 90.66 billion, with a year-on-year increase of 10.7%. There were sufficient settlement resources and strong certainty of future performance growth. At the end of the first half of 2021, the company’s net assets were about 19.067 billion yuan; Excluding advances received, the company’s asset liability ratio, net debt ratio and cash short debt ratio were 69.13%, 91.24% and 1.62 respectively, which were better than the regulatory level and belonged to the green housing enterprise. The average financing cost of 2021h1 company is 4.9%, which is 0.3pp lower than that at the end of 2020, far lower than the average level of the same industry. The actual controllers of the company continued to increase their holdings, demonstrating their confidence in the development of the company.
The sales amount increased rapidly, and the product quality premium was excellent. In 2021, the company achieved sales of RMB 169.1 billion, ranking the 22nd in the industry; The year-on-year growth rate was 24%, ranking the fifth in the year-on-year growth rate of top 50 real estate enterprises in 2021. In 2021h1, equity sales reached 43.43 billion yuan, a year-on-year increase of 63.8%, and the proportion of equity sales was 49.4%, a year-on-year increase of 1%. Performance and industry status rise simultaneously, providing a solid foundation and strong driving force for the company’s future development.
Actively take land and store abundant soil, and focus on the steady development of Zhejiang and Hangzhou. By the end of the first half of 2021, the company’s new land reserve area was 940000 square meters, and the cumulative land reserve area was 6.17 million square meters; The newly added soil storage capacity building surface is 2.34 million square meters, and the cumulative soil storage capacity building surface is 8.03 million square meters. The marketable value of the company’s land reserve is about 278 billion yuan. From the perspective of regional distribution, Hangzhou made the largest contribution to regional performance in the first half of the year, accounting for 67%; The sales of marketable value of soil storage outside Zhejiang Province and non Hangzhou region accounted for 16% and 17% respectively. Compared with the same period of last year, the sales outside Zhejiang Province increased by 23pp. The layout of deep cultivation is still significant, but the regional sales are more balanced.
Profit forecast and investment suggestions: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 3.073/38.71/4.665 billion respectively, with a growth rate of 32.02% / 25.97% / 20.52% respectively. Considering the strong sales growth of the company, we valued the performance in 2022 at 6 times, corresponding to the target price of RMB 7.44, which was covered for the first time and given a “buy” rating.
Risk tips: completion delivery is lower than expected, sales and payment collection are lower than expected, policy regulation is strengthened, etc.
