Summary of results in the first three quarters of 2011: the company achieved operating income of 629 million yuan, an increase of 115.3% over the same period last year; operating profit of 96 million yuan, an increase of 87.1% over the same period last year; net profit belonging to the owner of the parent company was 75 million yuan, an increase of 103% over the same period last year; and basic earnings per share was 0.24 yuan per share.
Sales fell in the third quarter, and the increase was due to the carry-over of real estate projects. The company's main business includes real estate development, lamp market leasing and commodity sales, mainly in Zhejiang, Sichuan and overseas. The company has no real estate projects for sale in the current period. judging from the cash received from the sale of goods and services, the company's market leasing and commodity sales business revenue has declined compared with the same period last year. The substantial increase in performance is due to the delivery and settlement of Wenling "time Garden" project and Wenzhou "Donglai Jinyuan" in the first half of the year, and the 430 million revenue plan for the whole year formulated at the beginning of the year was completed ahead of schedule.
However, as the company's real estate projects have been basically settled, the amount received in advance has dropped from 506 million yuan at the beginning of the year to 73 million yuan at the end of September, with fewer resources to be carried forward in the second half of the year and next year.
The real estate reserve is small, and it has entered the Hangzhou market for the first time. At present, the company has two project reserves. one is the "Hanyuefu" project in Jinhua, with a total construction area of about 70, 000 square meters. according to the current average price of 4000 yuan per square meter of commercial housing around, it is expected to bring 280 million yuan to the company, and pre-sale is expected to begin next year. Second, the Fushan site in Hangzhou won by the company in June, the total construction area of the project is 31600 square meters, and the floor price is about 7900 yuan per square meter, which has a larger profit margin compared with the average price of commercial housing around 18000 yuan per square meter.
Long-term financial leverage is low. As of the end of September 2011, the company's book cash was 85 million yuan, a decrease of 67.66% compared with the beginning of the year, mainly due to the payment of land transfer fees for Hangzhou plots, with no short-term liabilities. After deducting the amount received in advance, the real debt ratio is 14.75%, which is much lower than the industry average, and there is room for improvement in long-term financial leverage.
The integration of Wenzhou state-owned enterprises is still under way. In December 2010, the state-owned property rights of Zhejiang Oriental Group, the company's controlling shareholder, were transferred to Wenzhou Modern Service Industry Investment Group Co., Ltd., which is responsible for the construction of many key projects in Wenzhou, and according to the plan, by the end of the 12th five-year Plan, the capital securitization of the city's modern service group has increased from 20% to more than 50%. As the listed company resources of the group, the company is expected to benefit from the rapid development of the city's modern service group. At present, Wenzhou state-owned assets system is still in steady progress, and we still need to pay attention to the progress of its integration in the future.
Profit forecast and investment rating. Without considering the asset injection, we expect the company's EPS from 2011 to 2012 to be 0.28,0.10 yuan. Based on yesterday's closing price of 6.45 yuan, the dynamic price-to-earnings ratio is 23 times and 65 times, which does not have the valuation advantage. Considering that 23 enterprises under Wenzhou Hyundai Group are still in the stage of integration, the future planning and restructuring expectations are not clear, and the "neutral" rating is maintained for the time being. However, it is suggested that investors should continue to pay attention to the progress of the integration of Wenzhou's state-owned assets system.
Risk hints: market systemic risk and real estate regulation and control policy risk; project sales and development progress may not meet expectations; Wenzhou state-owned assets restructuring is uncertain.