21H1's homing net profit declined slightly compared with the same period last year.
The company released its semi-annual report on August 25, showing that 21H1 achieved revenue of 1.69 billion yuan,-8% year-on-year, and net profit of 620 million yuan,-4% year-on-year. The company's medical and beauty asset integration is progressing smoothly, looking forward to the follow-up progress of mergers and acquisitions; the smooth removal of real estate provides cash flow support for the transformation. We estimate the company's 21-year medical and beauty income of 120 million yuan, using PS valuation method, can be compared with the company's 21-year average PS (Wind consensus expectation) 50 times, considering the company's medical and beauty business volume is still small, give medical and beauty business 33 times 2021PS, a reasonable value of 4 billion yuan. The company's real estate business NAV is 28.3 billion yuan, taking into account the tightening of real estate regulation and control to increase the market downside risk, we give 48% discount, the reasonable value is 14.7 billion yuan. The reasonable value of the company is 18.7 billion yuan, and the target price is 6.16 yuan, maintaining the "overweight" rating.
The integration of medical and beauty assets is progressing smoothly.
On July 21, the company announced that it plans to use 337 million yuan in cash to acquire 100% equity stakes in three medical hospitals held by the related party Medical and American Industry Investment Fund and Global Equity Investment. The three hospitals in Wuxi / Tangshan / Shijiazhuang have a total income of 130 million yuan / net profit of 2094 million yuan / net interest rate of 16% 21H1 income of 6970 yuan / net profit of 8.08 million yuan / net interest rate of 12%. The transaction plan has been adopted by the shareholders' meeting on August 12, and we expect to be able to merge it by the end of the year, marking the gradual landing of the company's medical strategy. In addition, with the improvement of operating capacity, we expect that the company's Shanghai Tianda and Beijing Suya (not listed) are expected to turn losses into profits by the end of the year.
The smooth elimination of real estate projects provides cash flow support for the transformation.
Affected by the carry-over rhythm, 21H1 real estate business revenue year-on-year-13% to 1.5 billion yuan, dragging down the overall revenue growth. Real estate gross profit margin remained high from + 0.6pct to 67.1% year-on-year. The company accelerated the elimination of stock project sales in the first half of the year. The sales area of 21H1 is 90, 000 square meters, and the sales amount is 1.22 billion yuan, accounting for 95% and 82% of the whole year of 2020 respectively. Tianhua Silicon Valley Phase III construction, the company will continue to promote its and the North Bund Water City and other high-profit projects, to provide cash flow support for the transformation.
The acquisition of medical and beauty hospitals is expected to be settled and merged within this year, and the transaction plan of "increasing" rating companies to acquire three outside medical and beauty hospitals has been approved by the general meeting of shareholders. We conservatively assume that the three hospitals of Q4 will merge and slightly increase their revenue. It is estimated that the EPS for 21-23 years will be 0.35,0.50,0.52 yuan (the previous value is 0.35,0.45,0.46 yuan). The medical and beauty business adopts the PS valuation method, and its 21-year revenue is expected to be 120 million yuan, which is 50 times higher than the company's 21-year average PS (Wind consensus expectation). Considering that the volume of the company's medical and beauty business is still small, it is given 33 times 2021PS, which is a reasonable value of 4 billion yuan. The company's real estate business NAV is 28.3 billion yuan, taking into account the tightening of real estate regulation and control to increase the market downside risk, we give 48% discount, the reasonable value is 14.7 billion yuan. When the two are added together, the reasonable value of the company is 18.7 billion yuan, and the target price is 6.16 yuan (the previous value is 11.38 yuan), maintaining the "overweight" rating.
Risk tips: fluctuations in the regional real estate market, the landing rhythm of the actual medical and beauty business is not as expected, M & An is not as expected, and the risk of loss of key personnel.
