China Resources Land: Revenue In The First Half Of The Year Was 73.7 Billion, With A Year-On-Year Increase Of More Than 60%

If not for the overall downturn of the real estate industry and the frequent performance of a number of leading and even small and medium-sized real estate enterprises, China Resources Land, which has been in the tenth place in the industry for a long time, and the profit level remains in the middle and upper reaches, would not have received much attention.

When the market pursues high leverage and high turnover, China Resources Land is not dazzling enough. Even if it has a long-term layout of the first and second tier core cities, the business sector is firmly in the top position, and the profit margin is good. Such achievements are not as powerful as the title of "Biwan Hengrong".

But now, China Resources Land, such a stable performance, prudent style of real estate enterprises, may usher in a good time. In the first half of this year, China Resources Land handed over an irreproachable report card. Even the picky investors can give the sharpest evaluation only because "the dividend is not good enough" or "the share price is not attractive enough".

Dividends, share prices, are not as important as enterprises to live well. Under the current market background, only fine management and prudent investment are the way to survive against the cycle. China Resources Land, which was not radical in the past and will not rashly advance now, shows its development toughness.

Top students in the industry

From the business data, the growth of China Resources Land is a good level in the top 10.

In the first half of this year, the sales volume of China Resources land increased by a large margin, and the contracted amount was about 164.8 billion yuan, an increase of 48.7% over the same period last year; The contracted area was 9.63 million square meters, an increase of 52.4% over the same period last year.

In terms of operating revenue, China Resources Land's annual report showed that in the first half of this year, China Resources Land realized a comprehensive business volume of about 73.74 billion yuan, an annual growth of 63.8%; The gross profit was about 23.11 billion yuan, with a year-on-year increase of 53%. After deducting the appreciation of investment property appraisal, the core shareholders should account for 9.91 billion yuan of net profit, with a year-on-year increase of 18.3%; The net profit of shareholders included in the value-added evaluation of investment property accounted for 13.13 billion yuan, an increase of 15.4% year on year.

Specifically, the property turnover of China Resources Land development was 60.93 billion yuan, up 69.4% year on year; Rental income from investment properties (including hotel operation) was 8.28 billion yuan, up 63.4% year on year. The total calculated area is 5.14 million square meters, which is 2.93 million square meters in the same period of 2020, with an annual increase of 75.6%.

While the revenue and profit kept growing, the gross profit margin of China Resources land was still at a good level, but on the whole, it still recorded a decline. According to the interim report, in the first half of this year, China Resources Land's comprehensive gross margin was 31.3%, down from 33.5% in the same period last year; Among them, the gross profit rate of development property decreased from 31.1% in the same period of 2020 to 27.1%; The gross profit rate of investment property (including hotel operation) increased from 67.9% in the same period of 2020 to 69.8%.

At the performance meeting, the management of China Resources Land responded to the reasons for the decline in gross profit rate, saying that the development business was due to the relatively high price projects obtained in 2016-2018, which were mainly settled in this year and next year.

China Resources land also made corresponding plans for the increase of gross profit rate.

Li Xin, President of China Resources Land, mentioned two aspects: "from the strategic point of view of the company, first, the gross profit rate of development and sales business can be increased through diversified land acquisition channels. In short, take good land and land with high cost performance to improve the gross profit rate of the company; Second, by strengthening the refined management of production and operation and system construction, we will tap the potential in the management and control of two fees, including sales expenses and management expenses, in the management of housing costs and in the management of complex costs. "

While the performance is stable, the debt structure of China Resources land also maintains good. According to the statistics of Shell Research Institute, as of June 30, 2021, the asset liability ratio of China Resources Land after excluding advance collection is 60.9%, the net debt ratio is 37.4%, and the cash short debt ratio is 2.27. As a result, China Resources Land's mid-term indicators in 2021 are all up to standard, and continue to maintain "zero step on the line".

Be careful when you are the one to pick up the plate

An important change in the industry since this year is that many highly leveraged real estate enterprises have continued to face difficulties in the capital chain. The "top students" in such industries as China Resources Land are undoubtedly the ideal "catcher" in the eyes of those high leverage real estate enterprises.

At the performance meeting of China Resources Vientiane life held on Thursday morning, Li Xin was also asked whether "China Resources Vientiane life will negotiate with a major property for acquisition". On this issue, Li Xin said, "the company has not received a formal offer (invitation), but as an industry participant, it will pay attention to this matter. Paying attention to this matter does not mean that it will buy its property."

Such acquisition opportunities, China Resources Land is facing many. But this does not mean that it will willingly be the "catcher". At the performance meeting of China Resources Land, Li Xin answered the reporter of the 21st century economic report on whether he would negotiate with high leverage real estate enterprises. He said that there are many such opportunities for investment and acquisition in the market, and China Resources Land has always regarded the acquisition of land through diversified channels as one of the important strategic measures.

Li Xin pointed out that "the strategy adopted by China Resources Land is extensive contact and careful acquisition, the reason is that China Resources Land adheres to the principle of keeping expenditure within its means, maintaining its determination and selecting the best among the best." Although there are many opportunities for M & A, there will be many problems or risks in each M & A, whether it is the project side, the asset package side, or the company side. China Resources Land has been adhering to the principle of fully identifying risks and creating value in the process of M & A. At present, we have contacted dozens of potential merger and acquisition projects this year, but it is expected that the final acquisition may be single digits. "

From the perspective of land reserve, China Resources Land has indeed maintained a relatively high quality land quality. In the first half of this year, China Resources land acquired 33 new projects and added 7.14 million square meters of land reserve. Among them, the first and second tier cities account for 86% of the total investment, and focus on obtaining a number of city level TOD commercial complex projects in Hangzhou, Nanjing, Changsha, Zhengzhou and other cities.

Li Xin mentioned at the performance meeting that "the land quality acquired by China Resources Land in the first half of the year is very good, which is reflected in several aspects: first, the proportion of houses accounts for 85%; Second, it accounts for about 85% of the first and second tier cities. The profit margin of our marketable property is about 11.5%, which also shows that our land acquisition quality is relatively high. "

Being safe and secure is the principle China Resources Land has always adhered to. At the performance meeting, Li Xin stressed that "China Resources land will never make any rash moves in terms of acquisition and merger, and will expand steadily." This is a signal from the industry leader's signal to the thunderbolt real estate enterprises - if the asset quality is not good, no one will be the wrongdoer. Always remember: what you sell is not what you buy.

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