Main points of investment
Matters: according to the 2015 annual report, the company achieved revenue of 4.21 billion yuan, down 22.7% from the same period last year, and realized net profit of 389 million, up 7.54% from the same period last year, corresponding to EPS0.33 yuan, in line with expectations. The company plans to pay 0.9 yuan (including tax) for every 10 shares and increase 5 shares for every 10 shares in the capital reserve.
Peace viewpoint:
The performance is relatively flat, and the gross profit margin remains high: due to the 49.8% decline in settlement area, the company's 2015 revenue decreased by 22.7% compared with the same period last year. Due to the increase in settlement gross profit margin, net profit rose 7.5% year-on-year, while net profit after deducting non-profit decreased by 8.6%. During the period, the gross profit margin of the company's commercial housing sales business reached 42.0%, up 10.3 percentage points from the same period last year. Considering the low land acquisition cost of most of the company's land reserves, the company's short-term gross profit margin is expected to remain at a high level. In terms of business, the sales of commercial housing, shops and stores are the main sources of income of the company, accounting for 68.9% of the total income, while business operations and property management and other income account for 24.5% and 6.6%. At the end of the period, the company received 3.49 billion in advance, accounting for 82.9% of the annual revenue, laying the foundation for 2016 performance.
The sales situation is sound, and the land reserve is sufficient: during the period, the company achieved sales of 3.13 billion, with a sales area of 329000 square meters, up 16.0% and 6.3% respectively over the same period last year. Among them, trade and logistics achieved sales of 920 million, residential sales of 2.21 billion. At the end of the period, there are 5.48 million square meters of land and 1.948 million square meters of leased properties. According to the current development progress, it can meet the development of the next five years, and the land reserve is sufficient. The company has 3.78 billion yuan in cash on hand, which is 260% of the total liabilities due within one year (1.45 billion yuan), an increase of 147 percentage points over the previous period. The assets and liabilities excluding advance receipts were 51.5%, down 9.3 percentage points from the beginning of the period.
Back to the tree to enjoy the cool, equity incentives to protect the transformation of the business. The company's major shareholder, Southern Xiangjiang Group, is rich in resources, including four major industries: household circulation, real estate development, resources and energy, and financial investment. After realizing the injection of 100% equity in its Xiangjiang Commercial and Shenzhen stronghold during the period, the company once again announced a plan to acquire high-quality properties held by major shareholders in Shenyang, Guangzhou, Shenzhen, Zhengzhou and Changchun. It is expected to further increase the proportion of "self-owned property + self-owned investment operation" of listed companies, and speed up the strategic transformation of listed companies to commercial and trade business. During the period, the company announced the restricted equity incentive program, and the introduction of equity incentive is conducive to concerted efforts to protect the successful transformation of the business.
Investment advice: the company's EPS from 2016 to 2017 is expected to be 0.28 yuan and 0.33 yuan respectively, and the current share price is 24.8 times and 21.3 times PE respectively. The company's major shareholders are strong, equity incentives are conducive to stimulate the enthusiasm of employees, optimistic about the transformation of the company and the new atmosphere after employee incentives, and maintain the "recommended" rating.
Risk hint: the risk of sales and performance falling short of expectations.
