Economic Observer Network reporter Fu Xiaoyin Does the company have a better plan for improving gross profit margin and ROE in the future?
Will the company’s profit margins continue to decline in the future? Is the profitability of the newly added land bank expected to be higher in 2022, and is there any plan to sell the assets as a whole in the future?
The company’s performance has declined this year. Has the main problems in the past been reflected in a concentrated manner? Will the quality of the statements in the later stages, such as gross profit margin and inventory impairment, be more stable?
On the afternoon of March 22, at the 2021 results conference and investor exchange meeting of China Merchants Shekou, investors and market participants successively raised three questions related to profit margins.
On the evening of March 21, China Merchants Shekou Industrial Zone Holdings Co., Ltd. (001979.SZ, hereinafter referred to as “China Merchants Shekou”) released its 2021 annual results. For the whole year of 2021, China Merchants Shekou’s total operating income was 160.643 billion yuan, a year-on-year increase of 23.93% ; Net profit attributable to the parent was 10.372 billion yuan, a year-on-year decrease of 15.35%. China Merchants Shekou explained that the reasons for the decline in net profit are: the decline in the gross profit margin of the real estate business, the provision for impairment and the decrease in the income from the transfer of subsidiaries.
This is the second consecutive year of net profit decline of China Merchants Shekou, with a year-on-year decline of 23.58% in 2020.
To this end, “how to stabilize profits in the future” has also become the most frequently asked question by investors and market participants at this conference.
Jiang Tiefeng, managing director of China Merchants Shekou, said that in the second half of 2021, some of the land acquired by China Merchants Shekou seems to have a very good return, with a significant increase in gross profit, and the company’s profit margin will increase steadily in the future.
In terms of land acquisition in 2022, Jiang Tiefeng said that China Merchants Shekou “would rather not take it than take the wrong one”, and set up a number of indicators to check, and strictly screen the participating cities and plots, and the “five good cities” are the first choice, namely A city with a good market, strong profit certainty, strong team, good payment collection, and low inventory-to-sales ratio.
In addition, he also mentioned that in order to ensure profits, China Merchants Shekou has also increased its investment in the old reform business, and is currently looking at M&A projects. It is estimated that these will make a positive contribution to the company’s profit margin in the future.
As for whether there will be an overall transfer of assets to contribute to performance in the future, Jiang Tiefeng said that China Merchants Shekou will not adopt a simple overall transfer strategy for assets. At present, China Merchants Shekou divides assets into three categories, corresponding to different business strategies. The most core high-quality assets should be held firmly, and commercial assets with poor location and difficult to improve operating efficiency should be actively disposed of.
In addition to seeking benefits from management in residential, property management, office buildings, hotels and other holding assets, Jiang Tiefeng said that it is predicted that the scale of the industry will gradually decline from the top, and it is necessary to find a second curve for corporate growth.
He believes that the value of core asset property services will be further revealed. For stock assets, providing value-added services around customer needs, and doing a good job in the operation and management of these stock assets is the only way for future comprehensive development and profit growth.Return to Sohu, see more
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