With the continuous increase in industry concentration, competition among real estate companies has become increasingly fierce. In the context of the market’s entry into rational development and high-quality development, along with changes in the market environment and policies, the real estate industry may usher in a series of brand-new changes, including entering the stock market, demand-side upgrades, and cash flow management. For enterprises, the growth of their own assets basically means to a large extent, they have more confidence.
During the reporting period, the average value of total assets of the A-share sample companies in the first half of 2020 was 219.544 billion yuan, an increase of 15.74% year-on-year, but the increase was not as good as the same period in 2019; the average value of net assets was 412.70 trillion yuan, an increase of 23.51% year-on-year, compared with 2019 The growth rate during the same period increased by 4.52 percentage points. The average value of total assets of H-share sample companies in the first half of 2020 is 290.175 billion yuan, an increase of 14.32% year-on-year, which is lower than the same period in 2019; the average value of net assets is 561.58 trillion yuan, a year-on-year increase of 14.7%, and the increase rate is 4.7 compared to the same period in 2019 Percentage points.
On the whole, as the industry concentration continues to rise, real estate companies continue to scale up while consciously striding forward to achieve quality growth. Although the growth rate of enterprise scale has slowed down, the scale dispute between real estate companies will not immediately stop. The industry concentration is on the rise. If you don’t advance, you will retreat. Cases of big fish eating small fish have begun to increase in the industry.
In terms of revenue, in the “2020·China Listed Real Estate Companies Value List”, the average total operating income of A-share sample companies in the first half of 2020 is 17.201 billion yuan, a year-on-year increase of 2.79%, which is lower than the year-on-year increase of 27.01% in the same period in 2019. speed. The average total operating income of H-share sample companies in the first half of 2020 was 24.737 billion yuan, a year-on-year increase of 8.78%, which was lower than the year-on-year growth rate of 14.52% in the same period in 2019. The year-on-year growth rate of A-shares and H-shares slowed down in the first half of 2020, which may be related to the impact of the epidemic in the first half of the year.
Although the average revenue growth of real estate companies has slowed down, it still maintains a certain degree of growth, and it is an indisputable fact that the profitability of real estate companies is decreasing. In terms of profit scale, in the first half of 2020, the average net profit of A-shares and H-shares after deductions were 41.27 billion yuan and 56.158 billion yuan, respectively. Compared with the same period in 2019, there were different declines, a year-on-year decrease of 20.95% , 17.18%.
In terms of yield, the average return on equity (ROE) of the A-share sample companies in the first half of 2020 was 2.99%, which was far lower than the same period in 2019, down 2.73 percentage points; while the average ROA fell by 0.44 percentage points to 0.61%. The sales net profit margin also fell even more sharply. In the first half of 2020, the net sales margin of the A-share sample companies was 3.96%, which was 4.13 percentage points lower than the same period in 2019. Similarly, the sales gross profit margin also dropped by 5.69 percentage points to 29.58%.
In terms of H shares, the average return on net assets of the sample real estate companies in the first half of 2020 was 5.92%, a year-on-year decrease of 2.1 percentage points; the average net interest rate of total assets was 0.76, down 0.33 percentage points from the same period last year. In addition, the sales gross profit margin and net profit margin of non-deductible sales also declined. In the first half of 2020, the gross profit margin of sales fell 2.54 percentage points from the same period in 2019 to 30.34%; the net profit margin of non-deductible sales fell by 3.32 percentage points. To 6.21%.
From the perspective of profitability, the overall profitability of real estate companies in the first half of 2020 was significantly lower than the same period in 2019. The main reason is that under the background of strict control of the epidemic in the first half of the year, the overall economic environment has been impacted, and customers have chosen to reduce travel due to subjective or objective factors, which has greatly affected the sales of real estate companies. In order to increase sales, many real estate companies have cut prices and sold them, which has reduced their profit scale and led to a decline in revenue.
Analyze the list with the characteristics of equity investment as the main theme of this research. Among the top 10 equity investment value rankings of A-share and H-share listed real estate companies, these companies mainly show good profitability, large enterprise scale, and strong financing capabilities Features.
In terms of A-shares, the total assets of the TOP10 real estate companies all exceed 250 billion yuan, and 9 of them are in the top 10 of the enterprise scale sub-list, and one is closely followed by the 12th. Among the TOP10 companies, there are a total of 3 real estate companies with total assets of more than one trillion yuan, which far surpasses other sample housing companies. Among them, Vanke’s total assets are 1.806 trillion yuan, Greenland’s total assets are 1.171 trillion yuan, and Poly’s total assets are 1.095. Rongsheng Development, which has the lowest total assets in the TOP10, reached 260.511 billion yuan.
In the sub-list of A-share companies, Vanke, relying on the long-term healthy development of the basic market and active exploration of diversified businesses, has ensured the long-term stable growth of the company’s main business and ranked first on the list. In the first half of 2020, Vanke achieved total operating income of 146.35 billion yuan, a year-on-year increase of 4.97%; net profit after deducting non-recurring gains and losses was 12.114 billion yuan, a year-on-year increase of 6.73%; total assets were 1,806.19 billion yuan, a year-on-year increase of 14.52%; Net assets were 291.26 billion yuan, a year-on-year increase of 25.29%. Vanke’s performance has grown steadily, ranking first among A-share listed real estate companies in terms of total assets, net assets and net profit after deducting non-recurring gains and losses. In addition, from the perspective of the growth of Vanke’s operating income and non-net profit from 2015 to 2019, the compound growth rate of Vanke’s operating income from 2015 to 2019 was 17.12%, and the net profit after deducting non-recurring gains and losses was 21.44%. The growth rate of net profit is faster than the growth rate of operating income, and the cost control ability has been improved.
TOP10 real estate companies generally have strong profitability, which means that they can bring higher returns to their shareholders and therefore have higher investment value. In the A-share profitability sub-list TOP10, the total list of TOP10 real estate companies occupy 7 seats, and there are a total of 3 net assets with a return on equity of more than 10%. They are Jinke shares 12.69%, China Fortune 12.17%, and Greenland Holdings 10.26% . Among them, China Fortune and Jinke shares are ranked in the forefront of the A-share profitability sub-list due to their high return on net assets, high return on total assets and net sales margin.
During the reporting period, China Fortune Land Development achieved revenue of RMB 37.372 billion, with an asset-liability ratio of 83.1%, a year-on-year decrease of 5.0 percentage points; the management expense ratio fell by 0.4 percentage points year-on-year, achieving three consecutive years of decline; the sales expense ratio was 1.6%, compared with the previous year Over the same period, it dropped by 0.6 percentage points. The net profit attributable to the parent was 6.062 billion yuan, and the net profit rate was 16.2%. The profitability was further released. In terms of Jinke shares, during the reporting period, the company achieved operating income of 30.306 billion yuan, a year-on-year increase of 16%; realized net profit of 4.259 billion yuan, a year-on-year increase of 34%, of which net profit attributable to shareholders of listed companies was 3.615 billion yuan, a year-on-year increase of 40% ; During the period, the net profit margin reached 14.05%, an increase of 2 percentage points from the same period last year.
In addition to leading scale and outstanding profitability, the top 10 real estate companies on the overall list also have their own advantages in financing, debt repayment, and operations. From the perspective of financing capacity, in the first half of 2020, the cash inflow generated by the A-share listed sample housing companies through financing activities reached 1,139.039 billion, with an average inflow of 21.905 billion; the data for the top 10 real estate companies on the total list reached 578.174 billion, with an average inflow of 578.17 100 million yuan, far exceeding the average financing scale of the industry. Among them, Poly Real Estate ranked first in the financing scale with 94.598 billion yuan in cash inflow from financing activities.
Poly Real Estate uses its strong background in central enterprises to obtain financing. The average financing cost in the first half of 2020 is 4.84%, and the cash inflow from financing activities is 94.598 billion yuan, ranking first in the financing ability sub-list. The company achieved total operating income of 73.706 billion yuan in the first half of the year, a year-on-year increase of 3.6%; net profit of 13.322 billion yuan, a year-on-year increase of 2.8%; net profit attributable to the parent of 10.124 billion yuan, a year-on-year increase of 1.7%, gross profit margin of 35.72%, and net profit margin of 18.07 %; Both revenue and net profit have grown steadily, achieving high-quality steady development.
In addition, in terms of operational capabilities, Greenland Holdings ranks first in the sub-list of sample companies’ operational capabilities, and is also the only large-scale real estate company with total assets of more than one trillion in the A-share operational capabilities list. Inventory turnover rate and total asset turnover rate were 0.27 and 0.18 respectively. High turnover drove the rapid expansion of enterprises. In the first half of 2020, Greenland Holdings paid back 125.7 billion yuan, and the return rate rose to 95% year-on-year. The quality of the return has improved significantly. Among them, the sales amount of residential products accounted for over 70%, and the return rate was as high as 106%.
In terms of H shares, during the reporting period, the total assets of TOP10 real estate companies exceeded 100 billion, of which Evergrande’s total assets exceeded 2 trillion, followed by Country Garden and Vanke, with total assets of nearly 2 trillion; There are three companies including Sunac, China Resources, and China Shipping; overall, the larger real estate companies still show high investment value. In the sub-list of H-share companies, China Evergrande and Country Garden have respectively become the leading models of asset scale and sales scale.
As the first real estate company whose assets exceeded RMB 2 trillion, “largest” is one of Evergrande’s main labels, and it has been leading other real estate companies so far. In the first half of 2020, China Evergrande’s total assets were 2,299.097 billion yuan, net assets were 316.455 billion yuan, and total operating income was 268.962 billion yuan, all of which ranked first among the sample companies. In terms of sales, Evergrande’s contracted sales amount in the first half of 2020 was 348.84 billion yuan, compared with 281.8 billion yuan in 2019, an increase of 23.8%, and 54% of the annual contracted sales target of 650 billion yuan was completed; the sales area was 38.632 million square meters. A year-on-year increase of 47.5%; cumulative sales collection was 312 billion yuan, a year-on-year increase of 66.5%, and the sales collection rate was 89.4%, a year-on-year increase of nearly 23 percentage points.
In the first half of 2020, Country Garden’s equity contract sales amount reached 266.95 billion yuan, and the equity sales area reached 31.85 million square meters. The sales amount and area continued to be the first in the industry; the equity contract sales return amount was 250.93 billion yuan, and the comprehensive equity return rate reached 94%, and has exceeded 90% for 5 consecutive years. From 2016 to 2019, Country Garden’s equity contract sales have a compound annual growth rate of 33%. Sufficient land reserves are the basis for the substantial growth of its sales scale. During the reporting period, Country Garden’s equity land reserves in Mainland China were 265.81 million square meters, equity saleable resources were 2,340.4 billion yuan, and equity saleable resources obtained were 1,6698 billion yuan. The potential saleable resources of equity is 670.6 billion yuan, and the abundant land reserves will strongly support the future development of Country Garden.