Investment rating and valuation: at present, the land price of Tieling New Town has risen significantly, and the company has entered the harvest period. At the same time, the company is a typical beneficiary of the new type of urbanization, and the promotion of urbanization will bring space for the company to further expand its development area. Regardless of new projects, RNAV is currently raised by 24% to 11.8 yuan, with a relatively high discount and a "overweight" rating. 1) at present, the construction of the new town has taken shape, the government, schools, hospitals, infrastructure and supporting facilities have been basically completed, the sales of real estate projects have been smooth, the occupancy rate has gradually increased, and the number of developers has increased, resulting in a substantial increase in land prices. In 13 years, the land price has risen 40% to 1.05 million / mu, corresponding to RNAV rising 24% from 9.5 yuan to 11.8 yuan! 2) the existing area of the new city is 22 square kilometers, only 3.3 square kilometers has not been developed, and the capital and expenditure demand has decreased significantly, while the land of 13.5 square kilometers (9000 mu) has not yet been sold, the corresponding sales amount is about 14.4 billion, which will be sold by stages in 2013-2021, and the company is entering the harvest period. And the increase in land prices will benefit the company more richly. 3) in recent years, the process of industrialization and urbanization in Tieling City has been promoted rapidly, while there is still a lot of land around Tieling New Town that has not yet been developed, and the new town area has a larger extension space, if the company can undertake the land development business of the expansion area, then RNAV will be significantly improved. 4) due to the rapid rise in land prices, the company's RNAV has risen to 11.8 yuan and P/RNAV is 77%, which is at a low level. If there is a new regional expansion, the RNAV will be further enhanced. But given that it takes time to realise resources, 14-year earnings release is likely to slow. We estimate that the company's revenue in 13-15 will be 14.4,12.1 and 1.27 billion respectively, and EPS will be 1.35,1.17,1.24 yuan respectively, corresponding to 6.7,7.8,7.3 times PE in 13-15 years.
Key construction points: 1) the land price of Tieling New Town has risen to 1.05 million / mu in 13 years, and it will continue to rise by 10-15% in the future; 2) the economic and population growth of Tieling will remain at a high level in the future. the annual land transfer scale of about 900mu and the land price increase of about 10% are sustainable, and will bring room for further expansion for the company.
Different from the public understanding: at present, the land transfer price of Tieling New Town is higher than expected at the beginning of the year, bringing a significant increase in RNAV, and the urbanization process will also bring the company room for further expansion.
The catalyst of stock price performance: 1) the pre-plan for the issuance of corporate bonds was approved; 2) the land price rose more than expected; 3) the company obtained new development projects.