There has always been an “impossible triangle” in the real estate industry, saying that it is impossible for a real estate company to do it at the same time: the debt ratio is reduced, the cash flow is positive, and the sales scale continues to increase. But Gemdale, which pursues a “balance of scale and profit”, has its own ideas.
It is necessary to ensure that while the scale grows, financial and profit indicators do not regress, which places particularly high requirements on a company’s operational capabilities. The 2020 financial report handed over by Gemdale this time can be said to be quite satisfactory.
On the evening of April 16, Gemdale Group released its 2020 financial report. Data show that in 2020, Gemdale Group’s operating income was 83.982 billion yuan, an increase of 32.4% year-on-year; net profit attributable to shareholders of listed companies was 10.398 billion yuan, an increase of 3.2% year-on-year; annual contract sales were 242.68 billion yuan, a year-on-year increase 15%.
Gemdale was not immune to the problem of declining gross profit margin spreading across the industry, but Gemdale still maintained its excellent performance. In 2020, Gemdale Group’s real estate settlement income was 75.178 billion yuan, a year-on-year increase of 30.99%. Among them, the gross profit margin was 33.56%, a year-on-year decrease of 7.7%.
For Gemdale, revenue is growing rapidly, and this year’s sales growth rate is also guaranteed. How to ensure that the net profit attributable to the parent will not be dragged down is a problem to be improved in the future.
Good sales, further increase the first and second line layout
In 2020, Gemdale’s annual contract sales amounted to 242.68 billion yuan, a year-on-year increase of 15%. Gemdale has set a sales target of 280 billion yuan for 2021 Spark Global Limited.
What is commendable is that Gemdale has maintained its high gross profit. The gross profit margin of South China, the main revenue region, remained at a high level of 39.12%. Except for South China, Central China, and Northeast China, the gross profit margins of the other three regions have fallen by more than 10 percentage points. Huang Juncan, director and president of Gemdale, said that the company’s gross profit margin has declined in 2020 due to the non-speculation policy of housing and housing and the high land prices in hotspot cities, but it is still at a better level in the industry. Ling Ke, chairman of Gemdale, believes that the overall average profit level of the industry has gradually fallen this year, the gross profit rate of leading real estate companies has also gradually declined, and the company’s gross profit rate has also gradually declined. The company will improve the company’s overall profit performance in many ways in the future.
It is worth noting that Gemdale’s acquisition of land is centered on first- and second-tier cities. In 2020, it will acquire 116 lands in total and enter nine cities including Zhoushan, Fuzhou, Tangshan, and Zibo. The newly added land bank area is 16.57 million square meters. , New land reserves in second-tier cities accounted for approximately 66%. The concentration of land acquisition in first- and second-tier cities has made Gemdale Group’s land acquisition cost of 8573 yuan per square meter this year, an increase of 36.13% year-on-year.
As of the end of 2020, Gemdale Group has a total land reserve of approximately 60.36 million square meters, of which first- and second-tier cities account for approximately 71.2%. Sufficient land reserves in first- and second-tier cities have also become an important driving force for Gemdale’s subsequent growth.
Financial stability, “three red lines” 0 stepped on the line
Gemdale, which insists on balanced development, maintains a consistently excellent level of financial indicators. As of the end of the reporting period, Gemdale’s debt financing balance was 113.01 billion yuan, the weighted average cost of debt financing was 4.74%, and the debt-to-asset ratio was 76.59%. After excluding advance receipts, the debt-to-asset ratio was 68.51% and the net debt ratio was 62.53%.
On the one hand, good finance is the financial control of the enterprise itself, and on the other hand it benefits from its own operational hematopoietic ability. During the reporting period, Gemdale had net operating cash inflows of 7.515 billion yuan and held monetary funds of 54.197 billion yuan. After excluding restricted funds, the coverage multiple of interest-bearing liabilities due within one year was 1.21 times.