Wen/Leju Finance Zeng Shujia
A month ago, at the first quarter business analysis meeting of CSCEC Dongfu, Chairman Zuo Chenhua mentioned several key points: accelerating the completion of deconstruction tasks, focusing on the realization of cash flow management, and improving the efficiency of project development
As the real estate platform of China Construction Eighth Engineering Bureau, China Construction Dongfu is still accelerating.
In recent years, it has become more active in the real estate industry. In the land auction market, in March this year, it was priced at 2.657 billion yuan and won the plot of Gu Village, Baoshan, Shanghai; In October last year, it made a big investment of 7.59 billion yuan in Beijing.
Last year, CSCEC Dongfu achieved full caliber sales of 33.14 billion yuan, ranking 44 in the industry; In the first four months of this year, CSCEC Dongfu sold 6.17 billion yuan, continuing to stabilize at 43.
However, from 2021 to 2023, the gross profit rate of the real estate business of China Construction Eighth Engineering Bureau will be 13.03%, 11.99% and 10.05%, respectively, which will decrease for three consecutive years.
China Integrity International disclosed in a rating report that in 2022, CSCEC Dongfu will achieve a revenue of 26.259 billion yuan, which is basically in line with the real estate business revenue of the parent company, China Construction Eighth Engineering Bureau The net profit was - 0.22 billion yuan, in a loss state 。
At the same time, the rise of inventory, the decline of operating cash flow, and the decline of solvency are also the problems that China Construction Eighth Engineering Group and Dongfu Real Estate need to face.
Gross profit rate of real estate dropped for three years
China Construction Eighth Engineering Division was founded in 1952, and after a series of restructuring and reorganization, it became a wholly-owned subsidiary of CSCEC in 2007. It is still an A-share listed platform of CSCEC, holding 100% of its shares.
At present, the main business of China Construction Eighth Engineering Bureau includes housing construction engineering, infrastructure construction, real estate investment and development, design survey and consultation.
Last year, it achieved operating revenue of 501.247 billion yuan, up 19.68% year on year; The total profit was 16.284 billion, up 8.59% year on year; The net profit attributable to the parent company was 12.41 billion yuan, up 10.69% year on year.
In terms of business segments, its housing construction business had a revenue of 334.552 billion yuan last year, accounting for 66.74% of the total revenue; The revenue of infrastructure construction and investment business reached 150.701 billion, accounting for 30.07%, ranking second.
The real estate development and investment business of China Construction Eighth Engineering Bureau achieved a revenue of 19.418 billion last year, accounting for 3.87% of the total revenue. Compared with the above two businesses, its real estate development business volume is small.
However, China Construction Eighth Engineering Bureau still values real estate.
The layout and construction business has been extended to real estate development for many years, which is close to the water. It is convenient to obtain land and finance. Moreover, in several major businesses, it develops real estate with the highest gross profit rate.
Leju Finance and Economics has learned that in the past 2023, the gross profit rates of the three businesses of China Construction Eighth Engineering Bureau, namely, housing construction engineering, infrastructure construction and investment, and design exploration, were 5.57%, 7.73%, and -6.43% respectively, all of which did not exceed 10%, even negative.
However, the gross profit rate of its real estate development and investment business reached 10.05%, much higher than the overall gross profit rate of 6.66% of China Construction Eighth Engineering Bureau.
However, the gross profit rate of its real estate also declined in fluctuations. From 2021 to 2022, the gross profit rate of the real estate business of China Construction Eighth Engineering Bureau will be 13.03% and 11.99% respectively, and will decline to 10.05% in 2023, three consecutive years.
The real estate business of China Construction Eighth Engineering Bureau is mainly operated by the wholly-owned subsidiary Shanghai China Construction Dongfu Investment Development Co., Ltd. (hereinafter referred to as "China Construction Dongfu"). The business model is mainly independent development. The product types mainly involve commercial housing and security housing. The regional layout is in Shandong, Shanghai, Jiangsu and other places.
According to Kerui statistics, last year, CSCEC Dongfu achieved a full caliber sales of 33.14 billion yuan, ranking 44 in the industry, ranking second among the real estate companies of all CSCEC bureaus, on a par with the scale of CSCEC First Grade.
In the first four months of this year, CSCEC Dongfu achieved a full range sales of 6.17 billion yuan, ranking 43 in the industry.
Nevertheless, China Integrity International pointed out in a rating report that the development pace of the company has slowed down since 2022 due to the impact of the industry boom. It is necessary to pay attention to the de transformation of the real estate projects in hand and the investment pressure it faces.
The reason for making this judgment is that In the real estate business of China Construction Eighth Engineering Bureau, the newly started area will be 3831600 square meters in 2022, down from 4230900 square meters in 2021.
In addition, according to the statistics of China Integrity International, from 2020 to 2022, the pre-sale amount of the real estate business of CSCEC Eighth Engineering Division will be 49.743 billion, 51 billion and 38.428 billion respectively. Last year, the sales of CSCEC Dongfu reached 33.14 billion, but on the whole, its scale seems to be shrinking.
The price of the storm
According to the plan, the real estate business will still be one of the main businesses of China Construction Eighth Engineering Bureau in the future. It will be mainly distributed in the front-line and provincial capital cities, and will obtain project resources through the linkage of the primary and secondary land markets and public bidding, auction and listing.
In recent years, due to the pressure of funds, many large private enterprises have retreated from the local auction market, and state-owned enterprises have gradually become the protagonists. CSCEC Dongfu also took this opportunity to flash its active figure.
In March this year, CSCEC Dongfu priced 2.657 billion yuan and won a plot of land in Shanghai Baoshan Gucun. This plot is residential land, located in the east of Songjiang New Town, Baoshan District, Shanghai, with a planned floor area of 94997 square meters.
At the beginning of December last year, CSCEC Dongfu won the house in Jiangwan Town, Hongkou District, Shanghai with 1.458 billion yuan. The land was sold with an area of 10617.4 square meters and a total area of 26331 square meters.
Moving forward along the time line, last October, it was even more aggressive, winning lots 1518-621, 629 and 627 of Guogongzhuang Depot Project (Phase III) of Fengtai District Metro Line 9 with a lottery number of 7.59 billion yuan, with a premium rate of 15%, which caused heated discussion in the capital industry.
Similar examples are not uncommon. According to Kerui's statistics, in 2023, CSCEC Dongfu will increase the value of goods by 26.84 billion yuan, ranking 23rd in the industry. CSCEC Jiuhe, CSCEC Yipin, CSCEC Zhidi and other CSCEC real estate companies have been left behind by it, which can be said to be the best.
The soil stocks harvested in the land market are continuously converted into inventories in the financial statements.
By the end of 2022, the inventory of China Construction Eighth Engineering Group Co., Ltd. was 58.398 billion, and by the end of 2023, it will increase by 19.7% to 69.92 billion. In the past three months alone, by the end of the first quarter of this year, the inventory of China Construction Eighth Engineering Bureau had climbed to 76.17 billion again, up 8.9% from the end of last year.
In 2023, the net cash flow from the operating activities of China Construction Eighth Engineering Bureau will drop to 1.081 billion yuan from 14.369 billion yuan the previous year; Net cash flow from investing activities changed from - 1318 million to - 9028 million. This may indicate that while increasing the intensity of foreign investment, its business status is also under pressure.
According to the statistics of Leju Finance, As of the end of last year, the balance of the company's interest bearing debt within the scope of the consolidated statements of China Construction Eighth Engineering Bureau was 53.746 billion yuan, an increase of 31.51% year on year.
Among them, short-term debt due within one year reached 29.085 billion yuan, and long-term debt over one year was 24.661 billion yuan. In other words, the amount of its short-term debt exceeds that of its long-term debt.
In the same period, the monetary capital of China Construction Eighth Engineering Bureau was 54.574 billion yuan. Based on this calculation, its cash short debt ratio was 1.88, which can still cover short-term debt.
However, its asset liability ratio after excluding advance receipts increased from 59.63% to 63.3%, its current ratio decreased from 1.17 to 1.15, and its quick ratio decreased from 0.85 to 0.82.
A series of figures show that the debt pressure of China Construction Eighth Engineering Bureau has undergone subtle changes. In order to hold up the real estate that is still in the period of regulation and investment, the reduced solvency may become a barrier.
