\u3000\u3000 China State Construction Engineering Corporation Limited(601668) (601668)
The company is the core asset of China’s real estate chain, with leading advantages in real estate construction and real estate development business
China State Construction Engineering Corporation Limited(601668) is one of the largest comprehensive engineering contracting enterprises in the world. Its business covers real estate construction, infrastructure and investment, real estate development, survey and design, etc. its business volume and technical level are in the first echelon in China. The company is the core asset of China’s real estate chain, which is mainly reflected in two aspects:
1) housing construction is the trump card and core business of the company, with obvious leading advantages. The company’s real estate construction performance and technical strength represent the highest level in China’s real estate construction field. From the perspective of construction area, the company’s market share in China in 21 years is about 10.7%. The new signing and revenue volume of the company’s real estate construction business have obvious advantages over its main competitors. In the 21st year, the newly signed contract amount of the company’s housing construction was 2.25 trillion, accounting for 75% of the newly signed orders in the construction business, yoy + 8%; 21q1-3 company’s housing construction business revenue is 809.9 billion, yoy + 7%, accounting for 61% of the total revenue.
2) CNOOC real estate, the core real estate entity, has brand influence, quality and toughness. The real estate business of the company has three major real estate brands: CNOOC real estate (about 56% equity held by the company at the end of 21h1), CNOOC Hongyang and CSCEC real estate, of which CNOOC real estate is the core subject. 21q1-3 company’s real estate development business revenue is 217.8 billion, yoy + 38%, accounting for 16.3% of the total revenue. Focusing on the high-end market of first and second tier cities, CNOOC real estate has ranked first in the brand value list of Chinese real estate enterprises for many consecutive years. According to the Research Report on the competitiveness of 2021 listed real estate enterprises released on 2021 / 07, CNOOC real estate is in the green range of “three red lines”, indicating the solid operation quality of the company. Under the background of the new policy of “double centralized” land supply and the continuous strengthening of financial supervision, the industry has been under pressure as a whole in the past 21 years, and the company’s operation has been resilient. According to Kerui, the value of new land added by CNOOC real estate ranked industry No. 4 and equity sales ranked industry No. 6 in the past 21 years.
The prosperity of the real estate industry has reached the bottom, the interest rate has been cut, and more policy support can be expected in the future
The weak real estate sales and investment data of 21h2 shows that the prosperity of the industry is gradually buying the bottom; At the same time, from the perspective of capital source, there is pressure on sales collection and external financing, and real estate developers are facing great pressure as a whole. 22 / 1 / 17mlf cut interest rates by 10bp, and 1 / 20lpr1y and 5Y cut interest rates by 10bp / / 5bp respectively. The interest rate cut may stabilize or even inject more confidence into the marginal demand of real estate, or more policy support can be expected. In addition, the construction of indemnificatory housing may contribute considerable marginal increment to the supply of real estate and the demand of the industrial chain.
It is suggested to pay attention to the asset revaluation flexibility of the company, maintain the early performance forecast and maintain the “buy” rating
We maintain the previous performance forecast. It is estimated that the company’s net profit attributable to the parent company in 21-23 years will be 52.1/59.1/67 billion, and that of yoy will be 16% / 13% / 13% respectively. Among them, the net profit attributable to the parent company in real estate development business is expected to be 27.7/305/33 billion, and the net profit attributable to other businesses such as real estate construction and infrastructure is expected to be 24.4/286/33.9 billion respectively. Combined with the situation of comparable companies, considering the solid operation quality of the company’s real estate business and the stabilization of the industry expectation, the firm dominant position of the company in the field of real estate construction and the vigorous development momentum of infrastructure projects, and considering the gradual warming of stable economic expectation, we give the company the 22-year real estate business goal pe7 0x (corresponding to the business target market value of 213.3 billion), housing construction, infrastructure and other projects, and other business targets pe6.5 billion 5x (corresponding to the business target market value of 186.2 billion), the total target market value of the company for 22 years is 399.5 billion, corresponding to the overall PE of the company for 22 years is about 6.8x (vs the latest closing price corresponds to the pe3.8x of the company for 22 years). Maintain the “buy” rating and raise the company’s target price to 9.52 yuan. It is suggested to pay attention to the company’s asset revaluation flexibility and valuation repair space.
Risk tips: the growth rate of real estate investment is lower than expected, the growth rate of infrastructure investment is lower than expected, the transformation rhythm of order income is significantly slowed down, and the effect of cash recovery is lower than expected
