Performance summary: in the first half of 2011, the company achieved operating income of 11.35 million yuan, down 21.27% from the same period last year; net profit belonging to the parent company was 560 million yuan, an increase of 88 times over the same period last year; and basic earnings per share was 0.79 yuan.
Non-recurrent gains and losses are the main performance: the settlement income of real estate projects during the period is relatively small, and the net profit after deducting non-recurrent gains and losses is-0.036 yuan. The non-recurrent profit and loss mainly resulted from the investment income of 380 million yuan from the disposal of 31.52% equity of Shanghai Hongsheng Real Estate. At present, the company still holds 20% of Hongsheng's equity, which is measured by the equity method after the change of the cost method, the book value increases by more than 300 million yuan, and the after-tax profit is 250 million yuan if sold.
The amount of accounts received in advance increased significantly: 1.38 billion yuan at the end of the period, 1.48 times higher than at the beginning of the period, 120 million yuan for the Taishanghu project, 710 million yuan for the Huijing Tiandi project, and 3 billion yuan for the 2011 performance target.
The project reserve is small, but the project profitability is very strong: at present, the company mainly has two large-scale projects: "gorgeous Family Taishang Lake" and "Huijing Tiandi" (51% equity), with a planned construction area of 1.09 million square meters and an equity construction area of about 1.02 million square meters. In addition, the major shareholder holds a 49% stake in Jindui Real Estate (the main development project) and promises to transfer part or all of it to the listed company when the conditions are ripe. The profitability of these two projects is very strong: the saleable area of the "Huijing Tiandi" project is about 100900 square meters, and the sales price can reach 60, 000 square meters. After all sales, it is expected to achieve sales revenue of 4.5 billion yuan, resulting in a net profit of about 1 billion yuan. Taishang Lake project is a townhouse or single-family villa, settlement gross profit of about 50%. In addition, the company still holds a 20% stake in the Xintiandi project and is expected to make a profit in the form of equity sales in the future, with a return on investment as high as 50%.
Potential projects: during the period, the company signed a cooperation agreement to develop Suzhou "Tongli Culture and Leisure Expo Park" project, the company controls 70%, the initial development site covers an area of 1200 mu, with a total investment of 3 billion yuan, the company has the opportunity to obtain the target land. The company plans to start construction of 210000 square meters in 2011, complete 296000 square meters, according to the average annual settlement of 200000 square meters, the project reserve can maintain the steady development of the company in the past five years.
Actively develop the second main business: in 2010, it acquired a 100% stake in Guangdong Huafu Investment, with a total purchase price of 555 million yuan; indirectly acquired a 40% stake in Huatai Great Wall Futures, with an initial investment cost of 240 million yuan and a profit of 10.71 million yuan in 2010. During the period, the company and major shareholders invested 200 million yuan to acquire 100% equity in Haitai Investment, indirectly held a 61.6% stake in Haitai Pharmaceutical Industry, and entered the biological and pharmaceutical industries.
Maintain the investment rating of "overweight". We predict that the company's earnings per share in 2011 and 2012 are 1.18 yuan and 1.04 yuan respectively, according to the company's recent closing price of 22.64 yuan, the corresponding dynamic price-to-earnings ratio is 19 times and 22 times respectively. Maintain the investment rating of "overweight".