Leju Finance Li LiOn December 28, Wanlian ** released a research report on Huafa shares (600325).
Key elements of the report:
After years of intensive cultivation, the company has realized the development of the layout from local to national, continued to cultivate the main body of the city with good fundamentals, and achieved sustained growth in the face of industry adversity, reflecting the excellent management decision-making ability of the company's management.
Zhuhai state-owned leading real estate enterprises, stable and solid operation and management. The company was established in 1992, and since 2012, the company has implemented the strategy of "taking root in Zhuhai and going to the whole country", opening a national layout, and in 2022, the company will enter the top 20 real estate companies in the country. Huafa Group, the controlling shareholder of the company, has been among the "Top 500 Chinese Enterprises" for eight consecutive years, has strong strength and continues to support the company's development, and has increased its shareholding in the company many times in history, participated in the company's private placement, etc. The company's management is stable, and the company's interests are bound to middle and senior managers through equity incentives, driving the enthusiasm and initiative of the management.
Operation: steady progress and continuous breakthroughs. Business, while deeply cultivating the main business of real estate development, the company actively lays out diversified businesses, and has formed a "1+3" diversified business development pattern with residential as the main business, commercial operation, property management and upstream and downstream industrial chain as the support. Sales, the company's sales from 2014 to 2022 compound growth rate of 39%, ranking first among the major listed companies in the same industry, the overall rapid expansion, in 2021, 2022, 2023 H1 company contract sales amount, 2024 and 769300 million yuan, a year-on-year change of +12%、-1.4% and +558%, which is significantly better than the average of the top 100. Regionally, focusing on core cities, the company continued to maintain and give full play to the ballast stone effect in East China, continued to consolidate the leading position in Zhuhai region, and continued to deepen the company's "4+1" national regional strategic layout. The new land reserves focus on core cities with stable fundamentals, and the future decentralization is more secure. Investment, fixed investment by sales, to maintain a steady land acquisition intensity, in 2022 and 2023 (as of December 17) the company's land acquisition intensity is 397% and 331%。Compared with the major real estate companies with the largest sales scale in the same industry this year, the company's land acquisition intensity from January to November 2023 is at the upper middle level. As of the end of 2022, the company has 386 land to be developed380,000 square meters, with an area of 1,385 under construction060,000 square meters, a total of 1,771440,000 square meters, the construction area of the land to be developed at the end of 2022 is equivalent to the sales area of that year. At the end of 2022, the company's top 10 cities with planned construction area to be developed and construction area under construction accounted for a total of 694%, and the top 15 cities accounted for 824%, by analyzing and comparing the growth rate of per capita GDP and permanent population in the main cities of the company's land reserve layout from 2014 to 2022, except for the decline in the per capita GDP of individual cities, most cities have maintained a trend of net population inflow and per capita GDP growth, and the overall fundamentals are good, laying a good foundation for the company's future land reserve depletion.
Finance: Financial health, leverage level control. The company's performance is stable, and the unsettled revenue sold has a high revenue guarantee multiple. From 2014 to 2022, the company's operating income CAGR reached 3034%, and the net profit attributable to the parent company CAGR reached 1887%, and the company achieved a total operating income of 472 in the first three quarters of 2023500 million yuan, a year-on-year increase of 4024%, net profit attributable to the parent company 220.1 billion yuan, a year-on-year increase of 114%。The three red lines remained at a low level of leverage after turning green.
Profit** and investment suggestions: Wanlian** expects the company's operating income from 2023 to 2025 to be 100 million yuan, and the net profit attributable to the parent company will be200 million yuan, and the corresponding PE of the current stock price (as of December 20, 2023) is .6 times, covering for the first time and giving an "overweight" rating.
Risk factors: the policy easing of the real estate industry is less than expected, the credit risk of the industry continues to spread beyond expectations, the settlement income is less than expected, the company's sales growth is less than expected, and the company's gross profit margin performance is less than expected.
Related companies: Huafa shares SH600325, Wanlian**.