Event: sunshine shares released three quarterly reports, the company achieved operating income of 410 million yuan in the first three quarters, down 9.67% from the same period last year, including 177 million yuan in the third quarter, an increase of 58.21% over the same period last year. The loss in the first three quarters was 336 million yuan, including a loss of 200 million yuan in the third quarter.
Comments:
Performance loss has no effect on intrinsic value and long-term development. The company lost 336 million yuan in the first three quarters, including a loss of 200 million yuan in the third quarter. The main reason is that the sales revenue of residential products decreased in the first three quarters of this year compared with the same period last year, and asset losses resulted from the termination of operating leasing projects in the current period. The company has previously actively sought transformation due to greater operating pressure, and the current loss is expected to enhance the driving force for development.
Speed up the disposal of original assets, the expectation of transformation is getting stronger and stronger, and the logic continues to be realized. The company is actively promoting the withdrawal of Shanghai Jinjiang International Shopping Center, a charter project on Shanghai Huaihai Road. Because there is still a dispute about the withdrawal between Shanghai Xinshangdong Asset Management Co., Ltd., a subsidiary of the lessee of the project, and the original owner, Shanghai Jinjiang International Shopping Center, the two sides are currently resolving the matter through legal channels. There is great uncertainty about the impact of the dispute on the company, and it is not possible to accurately predict its actual impact on the company. In addition, the company also plans to speed up the cooperation and transfer of the Shanghai Yinhe Hotel project. Through the continuous divestiture, the company's transformation expectations are stronger, and the previous recommendation logic continues to be realized.
Greater intrinsic value provides a margin of security. In the first half of 2016, the rental rates of projects such as Sunshine Mansion and Chengdu Jiuyan Bridge increased significantly, and the company's rental income is expected to increase steadily. Benefiting from the continuous decline in the risk-free rate of return, the value of commercial property has increased significantly according to the discounted cash flow method. The company holds commercial properties are located in the core first-and second-tier cities, each year has a stable rental income of 200-300 million yuan. From the accounting value, the investment real estate held by the company is worth 5.041 billion yuan, but the real intrinsic value is close to 7 billion yuan.
At present, the company has no actual controller, and the senior management has a high degree of control and sufficient driving force for development. LeadingBigLimited acquired 29.12% of Sunshine shares in August 2015. four senior executives, Tang Jun (Chairman of the Company), he Xi (President), Li Guoping (Assistant to the President and head of Finance) and Yang Ning (Vice President) became major shareholders of GP, the major shareholder of the company's major shareholder (LeadingBigLimited) through the limited partnership structure. Tang Jun and Li Guoping are also directors of LeadingBigLimited.
The termination of major asset restructuring can not conceal the real value. Sunshine shares previously disclosed the restructuring plan, the company plans to issue shares to buy the shares of Chinese Culture Co., Ltd.'s Sports Olympic Power (Beijing) Sports Communication Co., Ltd., and raise supporting funds at the same time. Later, due to the latest regulatory policy-oriented adjustment, the company decided to terminate this major asset restructuring, resumed trading on July 14, 2016, and promised not to plan any major asset restructuring within six months (as of January 13, 2017). We believe that the reorganization terminates without compromising the true value of the company.
Investment advice: sunshine shares focus on the layout of commercial properties in first-and second-tier cities. The former share price of the company is much lower than that of RNAV, and the margin of safety is extremely strong. The real value cannot be concealed at the end of the reorganization, and the "overweight" rating is maintained.
Risk tip: monetary policy tightens.
