Vanke A (000002): The average development benchmark appropriately converged in the first half of the year
The company’s core advantage lies in its leading strategy and management level, possessing endogenous and evolutionary capabilities that are not available to ordinary real estate companies. With the increasing concentration of the industry, it will be able to fully release the alpha brought about by itself and industry changes in the future.
In the short-term perspective, the company’s performance continues to grow steadily and robustly, the potential value of new business is gradually becoming apparent, and the estimated premium compared to its peers is not high. We maintain a “strongly recommended-A” rating with a target price of 35.
9 yuan / share (corresponding to PE = 10X in 2019).
Investment highlights: (1) The first half of the year results maintained steady growth.
In the first half of the year, the company’s revenue / operating profit / attributable net profit was 139.3 billion / 27.9 billion / 11.8 billion, respectively 31% / 42% / 30%.
The growth of the company’s performance mainly benefited from the entry of previous price increases into the settlement cycle. The settlement area and average settlement price of the development business increased by + 21% and + 10% respectively, and the settlement gross profit margin was replaced and improved.
1 PCT to 36.
8%, but the equity ratio of budgeted settlement items has declined, driving the growth of net profit attributable to mothers to converge to 30%, which is roughly the same as the growth rate of income.
Prospects, the completed area is basically the same as the initial plan, which is 30.77 million square meters, corresponding to + 12% growth. It is expected that the growth rate of settlement area is slightly higher than the completion growth rate; the average settlement price in the first half of the year1.
570,000 yuan / flat (previously + 10%), the average price of the outstanding resources sold in each month is about 1.
410,000 yuan / meter (compared to the end of last year + 4%), the average long-term settlement price growth rate is expected to converge from the first half; comprehensively, the income growth rate will gradually be carried forward at about 20%.
(2) Appropriate contraction of land acquisition strategy in the first half of the year when core cities have high premium rates.
The company’s full-caliber sales area / amount from January to July this year was 24.64 million square meters / 388.2 billion US dollars, which increased each year.
2% / 9.
In January-July, a total of 19.66 million square meters of newly built capacity was built (71% equity ratio, 18 years earlier + 18 PCT), corresponding to a total land purchase price of 139.7 billion yuan, and the “land payment / revenue” decreased earlier than 18.5PCT to 37%, the land acquisition strategy has appropriately converged, and the average floor price of the project has been increased to 0.
71 million / sqm, “land price / content” recorded 46%, slightly higher than the previous two years but still controllable, that is, in the context of the high premium rate of core urban land in the first half of the year, the company’s land acquisition strategy has appropriately converged and the cost remainsControllable.
On the whole, the company has ample unsold volume and focuses on the first and second lines and attractions three and four lines. Until the end of July, the company’s full-caliber under construction and unbuilt land storage area was about 1.
500 million flats, excluding the sale of unsold open construction area of about 1.
100 million cubic meters, which can meet the development of the next 2-3 years and continue the characteristics of high turnover.
(3) The diversified business has developed rapidly and all are in the leading position in the industry, and the potential value has gradually become prominent.
Property management: 52 in the first half of the year.
800 million, previously + 27% (18 years + 33%), accounting for 3 of the company’s total revenue.
8%; the report benchmark, new projects contracted saturated income of nearly $ 2.2 billion, every + 114%, of which residential business accounted for 62%, non-residential business accounted for 38%.
The basic market of Vanke Property is that both residential and commercial enterprises fly together. In recent years, it has actively developed project resources, has grown rapidly, and has a good market reputation. It can refer to the market value of real estate subsidiaries of real estate companies of equivalent mass in Hong Kong stocks, which has great potential value.
Commercial properties: As of the middle of the year, 南宁桑拿 the company has managed a total construction area of more than 13.5 million square meters of commercial projects. Among them, there are more than 110 operating groups of SCPG (reduced by 10 earlier). The management area is nearly 9.15 million square meters.Square meters (90% are shopping malls, and the occupancy rate is about 97%).
The basic business model is to continuously improve the operating performance of existing projects. Its scale is already in the forefront of the industry, and its potential value can also be.
Logistics and real estate: In the first half of the year, Wanwei Logistics acquired 9 new projects, corresponding to 74 general-purpose leasable properties. In the past year, it has entered 44 cities and gradually acquired 127 projects.There are 64 operating projects, including 55 high-standard library projects and 9 cold chain projects, of which the high-standard library stable operation projects lease and transport on average 92%.
In addition, the company holds ProLogis 21.
4% equity, which is the single largest holder.
The company’s logistics real estate has been in a leading position in the industry, with a significant revaluation (billions of billions).
(4) The debt ratio remains low and the financial structure is extremely stable.
As of the middle of the year, the company’s book interest-bearing debt was USD 2253 million, of which bank borrowings / bonds / other borrowings accounted for 59% / 26% / 15% respectively, corresponding to a comprehensive cost of approximately 6.
2% (5 at the end of 18).
4%); The net debt ratio has increased by 4PCT to 35% compared to the end of 18, which is consistently at the industry’s cash level; the company has 1439 ppm of cash in hand, and the protection multiple against spot interest resistance is up to 2.The financial structure is doubled.
Investment suggestion: The company’s core advantage lies in its leading strategy and management level. It possesses endogenous and evolutionary capabilities that ordinary real estate companies do not have. Under the trend of increasing industry concentration, it will be able to fully release the alpha brought about by itself and the evolution of the industry in the future.
In the short-term perspective, the company’s performance continues to grow steadily, the potential value of new business gradually becomes prominent, and the estimated premium compared to its peers is not too high. It maintains a “strongly recommended-A” rating and a target price (corresponding to PE = 10X in 2019).
Risk reminder: The gradual transformational risk caused by the uncertainty of the equity structure, the long-term mechanism fell below expectations, and the real estate sales fell short of expectations.