1. In 2010, commercial housing sales were unfavorable, and less carry-over led to lower-than-expected performance.
In 2010, the company achieved commercial housing sales of 1.098 billion yuan (YOY-63.64%), which is not a small gap compared to our forecast of 2 billion yuan. The company's performance declined compared with the same period in 2009, mainly due to the small carry-over area of the company's real estate projects and the relatively large non-recurrent income in 2009. The projects settled by the company in 2010 include Zhangquan Garden in South Bank Huacheng, multi-storey Goya apartment project Phase II, Dengfuxiang Project Phase II, Tianxing Garden Phase II, Eli Villa Phase I townhouse part, and so on.
2. The expansion of the project is still slow, and the removal rate of the project in Tiandu City is worthy of attention.
In 2010, the company obtained two projects (Yu Zheng hang out (2010) 52 and 70 plots), both of which are located near Tiandu City of Yuhang City. These two projects are the follow-up parts of the Tiandu City project, we think that the company will mainly digest the existing projects in Tiandu City for a period of time, in addition, the company will also appropriately assist to do some fast turnover projects or some capital operations to increase current profits.
3. This year's profit investment income will account for most of the net profit
In March this year, the company passed the "proposal on transferring 100% equity interest in Dongyang Lantian Baiyun Real Estate Co., Ltd.". Xintiandi 2-3 is a project held by Dongyang Lantian Baiyun Real Estate Co., Ltd. the project was originally planned for a low-density residential project covering an area of 100000 square meters, but it has not been developed for a variety of reasons. The company sells the project and is expected to get an investment income of 270 million yuan. Performance will be reflected in 2011.
4. The turbulence of management has a negative impact on the development of the company.
In 2010, the company strengthened the leadership reform and made adjustments to the general manager, secretaries, financial leaders and other senior executives, mainly because shareholders are dissatisfied with the slow development of the company in recent years. However, the company's performance in 2010 was still poor, and this time the company's board of directors passed a bill to replace the general manager. We believe that the management of the company still needs some time to adjust to the future development of the company.
5. Investment suggestions
We maintain the company's "prudent recommendation-A" rating, and we forecast the company's EPS to $0.43, $0.29 and $0.31 in 2011, 2012 and 2013. RNAV4.82 yuan for the company. At present, the stock price of the company has reasonably reflected the fundamentals of the company, and the target price of the company is not given for the time being.
