POLY REAL ESTATE (600048.SH) : A-shares leading property company with an appeal of its assessed value
Poly Real Estate sticks to a "3+2+X" regional distribution strategy which isfocused on first-tier and second-tier central cities. By the end of June, 2014,Poly Real Estate's total housing area of land reserve has exceeded 84 millionsquare meters, which mainly distributed in five main economic zones in PearlRiver Delta, Yangtze River Delta, Bohai Bay Rim area and the Middle West;
From 2009 up to now, Poly Real Estate's property sale keeps growing rapidly,and its sales volume has grown from RMB 50,500 million in 2009 to anamount of expected over RMB 140,000 million in 2014, with a compoundgrowth rate at 22.6%, which guarantees Poly Real Estate to be the No. 1 groupin real estate companies of China;
In 2014, Poly Real Estate basically remains rather rapid growth, especiallyfrom the beginning of the third quarter, the growth is significant. The salesvolume and sales area of the former ten months of 2014 has added up to RMB106900 million and 8.32 million square meters, with a growth rate at 6.1% anda reduction rate at 6% respectively. The fabulous sales data benefits from Q3'spre-selling and market rebound. From November to December is the tidal wavefor sales promotion, and we predict that the Company's sales volume may hit agrowth of double digits and may have a possible to exceed RMB 140,000million in 2014.;
The report of the third quarter shows, its business revenue and net profitamount to RMB 52,200 million and RMB 6,080 million, with a growth rate at18% and 32% respectively, which is evidently rapider that that of the interimperformance. We predict that the gross margin of 2014 will have a slight pickup,that the Company will greet a tidal wave of settlement in the fourth quarter,and that the full-year performance is sure to perk up;
Poly Real Estate's book cash amounts to RMB 35800 million, its interestbearingdebt amounts to RMB 129300 million in total, and the average cost is6.48 percent of the benchmark floating. Its net debt ratio is 130%, rising by 12points compared with the end of the first half of the year, which still remainsrelatively high level;
The financial features of Poly Real Estate Group can be summarized as: itachieves rapid growth in its scale by means of relatively high financialleverage, and pays its matured debts and interests with abundant sale cash flow,thereby achieving its financial goals of high growth, turnover and ROE underhuge scale of debts. We expect a slight decline in EBITDA/interest coverageratio of the whole year in 2014 based on 2013, but it will still remain above 3times.