For real estate enterprises, land is not only the raw material, but also the most important investment made by the company. However, due to the tight land supply and skyrocketing land prices, the land has become the bottleneck of the growth of real estate enterprises. In order to obtain more land resources, real estate enterprises have been involved in the field of land development with low gross profit margin.
By stripping off greening and other inefficient assets to major shareholders during the share reform, Changchun Economic Development replaced 24 pieces of land (195,000 square meters) in the core area of the new city in the south of Changchun, and No. 5 land (348,000 square meters) and No. 7 land (257,000 square meters). Coupled with the 3.6 square kilometers of operating land in the Lingang Economic Zone before the share reform, a very unique "landlord" profit model has been established. Under this model, the company's profit is directly linked to the land price determined by bidding and auction when the land is sold in the future. If we only take the current auction land price and benchmark land price in Changchun as a reference, we estimate that the company's land resources are worth 15.2 billion yuan.
As an important city in northeast China, the economic development of Changchun is higher than the national average, but the absolute level of house prices and the increase in recent years are far behind the national average. With the relocation of the Changchun municipal government to the southern new city, the construction of southern Changchun has gradually entered the most exciting part, and more and more national well-known real estate enterprises are scrambling to move in. In the future, the rapid rise of land prices in Changchun has become a trend, and the real estate market in Changchun has also entered the eve of rapid growth.
The company's asset value of more than 10 billion yuan to the performance of rapid growth is still facing challenges, mainly because the development progress will be restricted by the provincial and municipal land use indicators. However, we believe that the speed of the release of the company's short-term performance can not hide the outstanding investment value of the company. Give an overweight rating.