Events. The company publishes its semi-annual report for 2021. During the reporting period, the company's overall business developed steadily, with operating income of 3.618 billion yuan, an increase of 70.14% over the same period last year. The net profit belonging to the owner of the parent company was 1.433 billion yuan, an increase of 0.68% over the same period last year.
During the reporting period, the increase in the company's operating income was mainly due to the increase in the income carried over from the comfortable housing project of the company's real estate development and sales business in the current period.
According to the company's semi-annual report of 2021, the real estate business: in the first half of the year, the contract sales area of 1000 square meters (all commercial residential sales projects) was realized, a decrease of 98.90% over the same period last year; the contract sales amount was 56.7337 million yuan (including commercial housing, parking spaces, etc.), a decrease of 90.31% over the same period last year.
Municipal business: successively won the bid Kirin G3G4 plot comfortable housing construction general contract, Qixia Mountain cruise ship home port supporting municipal infrastructure project and other projects, a number of projects won the "Yangtze Cup", "provincial standardization site" and other awards. Affected by the start pace of new projects during the reporting period, the company's municipal business achieved operating income of 260.6653 million yuan, down 24.87% from the same period last year.
Equity investment business: during the reporting period, two new projects were invested in Mai Pucci and Zhong Kefan, and additional investments were made in Antian Technology, Jiangeng Pharmaceutical, Nureit and Aywa, among which Antian Science and Technology and Jiangeng Pharmaceutical jointly invested in different platforms of the company. In order to further deepen strategic cooperation with Bank of Nanjing and consolidate the basis of investment income, the company contributed 1 billion yuan to subscribe for convertible bonds of Bank of Nanjing and chose the opportunity to increase its stake in Bank of Nanjing.
As of August 20, 2021, it has increased its holdings by a total of 872 million yuan this year, holding 10.01% of its shares. During the reporting period, the company effectively operated the Xiamen tungsten industry and other financial assets and cashed in the investment income in a timely manner. The company continues to urge cooperative fund managers to strengthen active management and risk control, among which the Gaokehao Xiding fund was terminated and liquidated on July 21, with a cumulative investment income of 365 million yuan and a profit of 225 million yuan this year. At present, in the company's investment projects, Novozan's application for listing on the gem has been approved by the Securities Regulatory Commission, and Jinpu Garden, Baepusai and Hualan shares have all submitted registration applications to the gem. The applications for listing of the Force Animation, Rendu Biology and other projects are all in the process. During the reporting period, the company realized investment income of 1.123 billion yuan, an increase of 25.35% over the same period last year, and realized fair value change income of 143 million yuan.
Investment advice: real estate municipal and equity investment business two-wheel drive, "better than the market" rating. The company is mainly engaged in real estate municipal and equity investment business. Adhering to the value-driven principle, the company strives to promote industrial linkage and industry-investment interaction, and effectively promote the transformation and upgrading of the main business and high-quality development. We estimate that the EPS of the company in 2021 and 2022 is 1.66 yuan and 1.77 yuan respectively. With reference to the average valuation of the relevant comparable listed companies in 2021, the company is given a dynamic PE of 6-7.5 times in 2021, and the corresponding reasonable value range is 9.96-12.45 yuan, maintaining the company's "better than the big market" rating.
Risk hint: the company faces the risk of raising interest rates and policy regulation, as well as the risk of unsuccessful transformation.
