20210712-招银国际-First_take_from_Corporate_Day__Zhenro_-_Front_end_bonds_are_good_carry_play_3页_421kb

报告摘要

CMBI Credit Commentary Summary

Core Content

This document is a credit commentary from CMBI Fixed Income Department, focusing on Zhenro's financial performance and creditworthiness in the first half of 2021 (1H21). The report evaluates the company's bond issuance, operational results, and refinancing capabilities, while also providing important disclosures and legal information for different regions.

Key Financial Highlights

Front-end Bonds Performance:
Zhenro's front-end bonds (22s - 23s at 5% - 7%) have shown resilience in a weak market environment, moving 1-4 points lower over the past two months. The bonds are considered a good carry play due to the company's stable fundamentals and prudent financial management.
Operational Results (1H21):
- Pre-sales: RMB82.3bn (+47% yoy)
- Annual Target Progress: 54% (RMB150bn target)
- Attributable Ratio of Pre-sales: Improved to 56%-57% from 55% in 2020, with a target of 60% for the full year 2021.
- Cash Collection Ratio: Slid to 70%-75% from 80% in 2020 due to tighter bank quotas in June 2021.
- Land Acquisition:
  - Total Cost: RMB17.6bn (~50% of cash collection)
  - Land Parcels: 22 parcels with GFA of 2.17sqm
  - Average Land Cost: ~RMB15k per sqm (up from ~RMB6.6k per sqm in 2020)
  - Location: 96% of new investment in tier 1 & 2 cities (Hangzhou, Guangzhou, Xiamen)
  - Estimated ASP: RMB30k per sqm (2x land cost)
Financial Targets and Metrics (1H21):
- Revenue Growth: +7% - +10% yoy (~RMB15.5bn to RMB16bn)
- GPM Level: Similar to 2020 (~19%)
- Cash/ST Debt Ratio: 2.0x
- Total Debt Growth: 5% - 8%
- Net Gearing Ratio: Targeted at 60%
- Adj. Lia-to-Asset Ratio: Targeted to be below 70% by 1H22 (was 76% in 2020)

Refinancing Prospects

2021 Repayment Needs: Estimated at ~USD610mm (onshore and offshore combined).
Refinancing Coverage: Repayment needs have been covered by new bond issuance in 2021, including USD1.41bn and CNH1.3bn offshore bonds, while repaying USD550mm and CNH1bn in 2021YTD.

Key Views

Zhenro's front-end bonds are viewed as a defensive and carry play due to its stable fundamentals and prudent financial management.
The company is on track to meet its "3-red-line" targets no later than 1H2022.
The higher land cost in 1H21 is attributed to the strategic focus on tier 1 & 2 cities, which are expected to yield higher average selling prices (ASP).

Important Disclosures

Author Certification: The author certifies that the views expressed are their personal views and not influenced by compensation.
Trading Conflicts: The author confirms no trading activity within 30 days before the report and no intention to trade within 3 business days after.
Disclaimer:
- The report is for informational purposes only and not investment advice.
- CMBIS is not liable for any loss or damage resulting from reliance on the report.
- The information is based on publicly available data and is subject to change without notice.
- CMBIS may have investment banking relationships with the issuers covered, which may lead to conflicts of interest.

Regional Distribution Restrictions

United Kingdom: The report is only provided to persons falling within Article 19(5) of the Financial Services and Markets Act 2000 or Article 49(2) (a) to (d) of the Order.
United States: The report is intended for distribution solely to "major US institutional investors" and not to any other person in the US.
Singapore: The report is distributed by CMBI (Singapore) Pte. Limited (CMBISG), an Exempt Financial Adviser. Legal responsibility is accepted only for Accredited Investors, Expert Investors, and Institutional Investors.