Main points of the report
Event description
Yatong shares, which belongs to the State-owned assets Supervision and Administration Commission of Chongming County, Shanghai, is the only state-owned listed company in Chongming County. Over the years, the company has been based in Chongming, and constantly trying to expand. This report is the first time we have covered the company.
Event comment
Located in Chongming, multi-habitat development. Before the reorganization in 2010, the company mainly engaged in the Yangtze River Estuary water passenger transport services, and involved in multi-industry operation. After the reorganization, the company replaces public welfare assets related to waterway transportation with excellent catering and hotel assets, making the company light. At present, the company's main business is real estate development, while involving communications engineering, advertising consulting business, agriculture, commodity sales business and so on.
The land reserve is rich, and the real estate helps the company's performance. The company's 2015 revenue and net profit increased by 10.54% and 7.62% respectively compared with the same period last year, mainly due to the increase in real estate sales. Or because the company's early land acquisition cost is relatively low, the gross profit level of the company's real estate sales (46.14%) occupies a high position in the industry. At present, the company's main development projects are the new town plot and Yulin residence in Chongming New City, which can be sold for a total of about 100000 square meters. In addition, the company has about 51300 square meters of relocation housing project in Shanghai Fengxian District and 2500 mu of agricultural land located in Chongming County, which constitutes the core competitiveness of the company. With the continuous development and development of Chongming in the future, there are certain expectations of land use change in this part of the land. In addition, the company also has seven property assets mainly located in Chongming, which can be leased to about 640000 square meters, which can bring more stable rental income to the company.
The competitiveness of communications projects continues to improve, and we will pay close attention to the window period of Shanghai's modern service industry. In terms of communication engineering business, the company has successively undertaken China Mobile Limited Tuancheng highway pipeline project, Chenjiazhen Development Company and Zhihui Island Park pipeline project, in addition, overseas business is also developing steadily, the PVC pipe processing plant in Angola is under steady construction, and its competitiveness is constantly improving. At present, the company's service industry is mainly concentrated in the media, trade and tourism business. Nowadays, the business and service industry is gradually ushering in the window of development, especially living in Shanghai, a leading first-tier city in the service industry in China, bathed in the good environment of Walt Disney Company's opening camp in Shanghai, and the company has a bright future in the modern service industry.
Investment suggestion: the company relies on the State-owned assets Supervision and Administration Commission of Chongming County with rich soil reserves and the expectation of land use change. We estimate that the company's EPS will be 0.09 yuan per share in 2016 and 0.11 yuan per share in 2017, and the PE of the previous share price will be 202.87 and 162.58 times respectively, giving a "buy" rating for the first time.
Risk hint: land use conversion risk, performance growth is relatively slow.
