The company's consolidated statement for 2009/9 reflected operating income of 880 million yuan, a year-on-year decrease of 8.27%; net profit attributable to the parent company was 11.43 million yuan, a decrease of 79% over the previous year; and basic earnings per share was 0.0071 yuan.
The main source of operating profit is investment income. The limited number of saleable housing projects was the main reason for the decline in operating income in the current period, but operating costs increased by 4 percentage points, and gross margin fell 9.4 percentage points. All of the profit came from the transfer of 50% of the shares of Guangdong Jinbin Real Estate Development Co., Ltd. to obtain an investment income of 60 million yuan. After excluding investment income, operating profit is negative. It can be seen that the company's current operating conditions are poor.
Jinbin has developed into a regional real estate enterprise in the Binhai New Area of Tianjin. Projects are excessively concentrated and its ability to withstand market risks is weak; the majority shareholder is Tianjin Teda Construction Group, which is controlled by the Tianjin Municipal Government. Tianjin Teda Construction Group is a first-level real estate development enterprise focusing on residential development. Currently, it has land reserves of more than 2 million square meters, mainly distributed in Tianjin and Suzhou, and has a certain competitive relationship with Jinbin Development. How to resolve competition in the industry and enhance resilience to risks is the biggest problem facing Tsuhama's development at present. However, as the only listing platform for majority shareholders, it is also a good choice if the majority shareholders inject real estate resources to achieve an overall listing.
Tsuhama Development currently has three business formats: housing, commercial real estate, and industry. The total construction area of the project is about 2.2 million square meters, of which the residential area accounts for about 1.3 million square meters. The project reserves are mainly 110,000 square meters in the CBD living area of the Binhai Development Zone and 860 acres of land in the “Mei Jiangnan” area. These two projects are expected to generate revenue of 2.2 billion yuan, an important source of profit in 2011.
The company's advance accounts for the current period increased markedly, to 698 million yuan, an increase of 2.8 times over the beginning of the period. It is mainly pre-sale housing for the Binhai International Project and the Hangu Tianrun Xinyuan Project. These two projects will be completed and settled by the end of 2009, and it is expected that the company's fourth quarter performance will increase significantly from month to month.
The company's application to issue no more than 700 million yuan of bonds has been approved by the China Securities Regulatory Commission.
The capital raised by the company is mainly used to relieve capital pressure and develop real estate projects. However, this move will increase the company's balance ratio to 68.9%, 7 percentage points higher than the industry average of 62.4%. Based on the good sales situation in the real estate market in Tianjin, there are no major obstacles to the carry-over and recovery of funds from the project, and the company's financial risk is not great.
Maintain a “neutral” investment rating. We predict that the company's earnings per share for 2009 and 2010 will be 0.06 yuan and 0.07 yuan respectively, and that the company's closing price on 2009/10/21 will be 5.35 yuan, and the corresponding dynamic price-earnings ratios will be 83 times and 78 times, respectively. Maintain a “neutral” investment rating.
