Overview of 2011 results: In 2011, the company achieved operating income of 271 million yuan, a year-on-year decrease of 22.13%; operating profit loss of 18.648,600 yuan, an increase of 6.4334 million yuan over the same period of the previous year; net profit attributable to owners of the parent company was 2,8653 million yuan, a decrease of 97.16% over the previous year; and basic earnings per share of 0.01 yuan.
Company Overview: In December 2010, the company and China Control Group carried out an asset exchange, investing in the loss-making heat and exhibition business. After the real estate business was replaced, the company's main business will increase commercial and residential real estate development business with high profit potential on the basis of the original first-level land contract development and engineering construction business. The joint development of land level 1 and 2 can effectively improve the core competitiveness and profitability of the company's main business.
The sharp decline in performance stemmed from incomparable factors: the company's 2011 performance fell sharply by 97% because there was an investment income of 69.71 million yuan last year, but not this year. Furthermore, the company had high non-operating income of 137 million yuan last year, while this year's non-operating income was only 27.46 million yuan. Last year's high investment income and non-operating income all came from non-recurring gains and losses from one-time asset swaps.
2011 was the first year of transformation of the company's main business into the real estate industry. The company's first real estate development project is “six in one”. The project plan covers an area of 433,000 square meters, with a total construction area of 987,000 square meters. The total investment of the project is estimated at 4.669 billion yuan, total sales revenue of 5.302 billion yuan, and total profit before tax of 633 million yuan.
The six-in-one project plan: In 2012, the construction area was 445,000 square meters, of which 287,000 square meters obtained a pre-sale license, achieving foreign sales of 170,000 square meters, with a sales amount of 900 million yuan. The company's cash flow situation will improve markedly as a result; in 2013, the first phase of sold products will be handed over, which will significantly increase the company's carry-over revenue at that time. During the reporting period, the “6 in 1” project basically completed various preliminary tasks such as plan planning, planning and design, approval processing, and bidding for construction units.
Summary of results from January to March 2012: In the first quarter of 2012, the company achieved operating income of 4,8892 million yuan, a year-on-year decrease of 16.83%; operating profit loss of 18.3072 million yuan, an increase of 7.5048 million yuan over the same period of the previous year; net profit loss attributable to owners of the parent company was 18.395 million yuan, an increase of 15.434,700 yuan over the same period last year; basic earnings per share - 0.04 yuan.
Development progress has accelerated, and long-term loans have increased: by the end of the first quarter of 2012, the company's monetary capital was 476 million yuan, an increase of 87.96% over the beginning of the period, because the new development loans had not yet been used. The company's prepaid accounts were $94.43 million, an increase of 42.32% over the beginning of the period, due to additional prepayments for the six-in-one project and land development expenses for District 5. The company's long-term loans were 446 million yuan, up 205.48% from the beginning of the period.
Short-term unpaid debt pressure, reasonable leverage level: as of the end of the first quarter of 2012, the company's monetary capital/ (short-term loans plus non-current liabilities maturing within one year) = 1.54, and the company's short-term capital pressure was worry-free. The company's real balance ratio after excluding prepaid accounts is 36.98%, and the company's leverage level is low in the industry.
Profit forecasts and investment ratings. We expect the company's 2012-2013 EPS to be 0.00 yuan or 0.04 yuan. Based on yesterday's closing price, the dynamic price-earnings ratio is -1,833 times and 142 times. The company needs 2013 real estate business to carry forward revenue. During this period, investors are advised to pay attention to the company's six-in-one sales situation and maintain the company's “neutral” rating.
Risk warning: Six-in-1 project sales fell short of expectations