Phoenix shares is a subsidiary of Jiangsu Phoenix Media Group. under the background of the revitalization of cultural industry and the great development of pension industry, the company has constructed three major business structures of health preservation and pension industry, cultural real estate and comprehensive finance. The company's development of pension industry will receive strong support from group funds, administrative resources, cultural resources and financial resources, solve the problems of land, funds, medical services and short-term performance support encountered in the process of joining the pension industry, and create a feasible development model of the whole industry chain of pension business in line with the local environment. Excluding the bank equity injection, we expect the company's expected earnings per share for 2014-16 to be 0.54,0.69 and 0.86 yuan respectively, with a target price of 12.35 yuan, which is equivalent to 23 times 2014 price-to-earnings ratio, with a buy rating for the first time.
Support the main points of rating
The first year of the pension industry contains a broad market space. 2014 is the first year of the pension industry, on the one hand, after the founding of the people's Republic of China, the first batch of baby boomers will gradually enter the elderly, followed by a sharp increase in the elderly population, on the other hand, the pension problem has been focused by the government. In the pension industry land, government support, financial support and tax incentives and other aspects of policy breakthroughs may be made to fill the gap. China's pension real estate is starting from immature, facing a broad market space, but the pension industry development and service model is still in exploration.
Enter the whole industry chain of old-age service and realize the project landing by the end of the year. The company announced its entry into the pension industry in October 13, and has made it clear that the pension industry is a major strategic development direction for 14 years, and plans to achieve the landing of the project this year; through cooperation with various professional institutions, the company will provide the elderly with full-industry chain services such as housekeeping, medical care, nursing, fitness, intelligent services, cultural life, pension real estate development, and ecological agriculture.
Actively expand all kinds of resources and prepare for transformation. The company has signed strategic agreements with Phoenix Group, Jiangsu people's Hospital and Renyi Investment in the early stage, and made some preparations in terms of land resources and professional medical services. in addition, the company plans to introduce third-party long-term funds and professional pension operation and management institutions to solve the problems of long-term funding sources and late-stage operation and services of the industry.
The three main industries of cultural pension finance have grown together. The company's traditional main business, Uygur cultural real estate, enjoys the advantage of taking land at a low price, but its disadvantage lies in the slow turnover of assets; the follow-up will form the structure of two major subsidiaries of Phoenix real estate and pension industry company, and culture and pension go hand in hand. In terms of financial equity, in addition to the 10.537% stake in Nanjing Securities that has been acquired, it is mentioned in the annual report that the group intends to inject 890 million equity into Jiangsu Bank. The injection of financial business can not only thicken the performance, but also provide cash flow support for the real estate business, which complements the other two main businesses.
Main risks faced by rating
The impact of large investment in the early development of pension real estate and long recovery cycle on the capital chain; the project acquisition process is slower than expected.
Valuation
With the full support of the group's resources, Phoenix shares may be the most likely to succeed among the companies in the real estate industry to enter the pension industry, and the company's goal is directly aimed at the pension industry chain. Land, sources of funds, service operations, performance and cash flow matching are considered and feasible. We expect that without considering the financial equity injection, the company's expected earnings per share for 2014-16 will be 0.54,0.69 and 0.86 yuan respectively. If the equity injection is successfully completed, the earnings per share will be significantly thickened. We set the target price at 12.35 yuan, which is equivalent to 23 times 2014 price-to-earnings ratio, with the first rating as buy.