Dingzeng will further boost the development of the business. On May 14, 2016, the company announced that the CSRC approved its non-public offering plan. The announcement of the company on July 28, 2016 has obtained the approval for additional issuance by the CSRC. According to the previously announced plan, Shenzhen Jinxinan, Xingning Jinshun'an and Xingning Zhongyifu plan to subscribe for shares in the company respectively in cash, among which Xingning Jinshun'an and Xingning Zhongyifu are the concerted actors of Shenzhen Jinxin'an. After the completion of the offering according to the reserve price, the proportion of shares held by Shenzhen Jin Xinan in the listed company will be further thickened and will remain the controlling shareholder of the listed company. At the same time, the funds raised will be invested in the company's first-level land development business in Xingning City to further promote the development of the business.
The company cooperates with the Xingning Municipal Government of Guangdong Province in land first-level development business. On November 20, 2014, the company, the people's Government of Xingning City, the Land Reserve and Land expropriation Service Center of Xingning City, and Enping Erjian signed the "Cooperation Agreement on the first Phase of Land Development and some Public facilities Construction of the Southern New Town of Xingning City". Jointly carry out the first phase of land development and part of the public facilities construction of the southern new town of Xingning City, and the project is operated by establishing a project company. After detailed calculation and feasibility study, the total investment of the project is 7.54 billion yuan, with the land transfer fee completed by the first-level development and the operating income of public facilities as the main source of income.
This first-level development involves land transfer of 11 billion yuan. The total land area of the first-class development project of the company is 13481 mu, the transferable area is about 19 plots, and the number of mu is 6390.67 mu, with a total of 4.2604 million square meters, of which the commercial, residential and commercial land that can be sold is 3.7535 million square meters, and the construction area is 1.3803 million square meters. From the point of view of the land transaction in Xingning City, the floor price of the land is about 800yuan per square meter, and the building area of its total commercial, residential and commercial land is 13.8 million square meters. It can be seen that the total amount of land sold for this first-class development is about 11 billion yuan.
Progress has been made in the new energy vehicle business. The company invested 15% of Guangdong Yunshan Automobile Company in 2015 and further subscribed for its capital increase and share expansion in January 2016 to maintain its 15% share. Yunshan Automobile is a bus manufacturer, and its two pure electric buses have entered the recommended model catalogue of the demonstration and application project of energy-saving and new energy vehicles. And its pure electric buses have been put into the bus operation of Xingning City.
Investment advice. It is estimated that the company's earnings per share in 2016 and 2017 will be 1.32 yuan and 1.68 yuan respectively. As of July 27, the company closed at 16.64 yuan, corresponding to PE 12.61 times in 2016 and PE 9.90 times in 2017. Considering the great potential for performance improvement after the first-level development of the company's transitional land, the company was given a "buy" rating of 18 times PE in 2016, corresponding to the target price of 23.76 yuan.
Risk hint. The recovery in the fundamentals of the industry fell short of expectations.
