The company's consolidated report for January-January 2010 showed that it achieved operating income of 575 million yuan, an increase of 147% over the previous year; net profit attributable to shareholders of the parent company was 6.65 million yuan, an increase of 13.9% over the previous year. Basic earnings per share were $0.004.
Profitability is below the industry average. The company's net profit margin was only 1.16%, and the return on net assets was 0.32%, far lower than the company's average net profit margin of 13.87% and return on net assets of 11.92%; the main reason was that the company's gross margin on product sales was low, only 0.54%, which dragged down the company's overall profit level.
Accounts received in advance were 884 million yuan, a slight increase of 4.95% over the beginning of the period. Mainly advance receipts for asset transfers from investment service centers and advance payments for Tianrun Xinyuan projects, Binhai International projects, and Margo Manor projects. In 2010, the company plans to achieve revenue of 2.88 billion yuan. We estimate that around 800 million yuan will come from commodity sales revenue, 150 million yuan will come from housing rental income, and the remaining 1.9 billion yuan will come mainly from real estate sales. Currently, advance payments lock in around 45% of our projected real estate sales revenue.
Asset structure and improvements. The balance ratio was 74.97%, and the real balance ratio after excluding accounts received in advance was 64.5%, and the quick ratio was 0.797 times. Compared with the real balance ratio of 58.5% in 2008 and the rapid ratio of 0.58 times, long-term financial leverage increased, and short-term financial risk declined, mainly due to the company's completion of issuing 700 million yuan of corporate bonds in 2009, with an interest rate of 7.2%.
Expenses were reduced relatively during the period. Expenses during the reporting period increased by 38.98% year-on-year. Among them, sales expenses and financial expenses increased by 185% and 42.64% respectively, mainly due to a sharp increase in marketing and promotion expenses, an increase in the scale of loans, and an increase in interest payable on corporate bonds. The cost rate for the period was 11.12%, down 8.64 percentage points from the previous year, mainly because the absolute increase in expenses for the period was lower than sales.
Jinbin developed into a regional real estate enterprise in the Binhai New Area of Tianjin, with projects mainly distributed in the Binhai New Area. Currently, housing project reserves mainly include Binhai International, Hangu Tianrun Xinyuan, Margaux Manor, and Binhai St. George Town. Investment real estate is about 300,000 square meters. Potential project reserves of 860 acres of land in “Mei Jiangnan” and 110,000 square meters of land in the CBD living area of the Binhai Development Zone are important sources of future performance.
The rating was raised to “increase holdings.” We predict that the company's earnings per share from 2010 to 2012 will be 0.20 yuan, 0.26 yuan, and 0.35 yuan respectively. According to the company's recent closing price of 5.51 yuan, the corresponding dynamic price-earnings ratios will be 27 times, 21 times, and 16 times, respectively. Despite a sharp increase in performance, the valuation advantage was not obvious, maintaining a “neutral” investment rating.
