Shunfa Hengye released its three-quarter 2016 report, with operating revenue of 2.8 billion, up 1.67% from the same period last year, and net profit attributable to the parent company of 280 million, up 18.82% from the same period last year.
Profit margin continues to improve and sales grow steadily: the company's settlement items in the first three quarters mainly include Kangzhuang, Dixiang, Jiangnan Lijin, Yuyuan Phase I, Hengyuan, etc., with the improvement of the overall market environment leading to a steady increase in settlement scale. the reasons why the company's net profit growth is greater than revenue are as follows: 1. The profit margin improved, and the company's gross profit margin increased by 4 percentage points to 29% in the first three quarters compared with the same period last year. Projects with better gross profit margin, such as Hengyuan and Kangzhuang, have entered the settlement cycle. 2. The expense rate has improved, and the company's sales expense rate has decreased by 0.6 percentage points compared with the end of 2015. The good sales since the third quarter have ensured the company's carry-forward resources, and the results in the first three quarters have ensured the performance for the whole of 2016.
Corporate bonds were issued smoothly and the financial situation continued to improve: 2016 was the year when the company made full use of capital market financing, successfully completed the fixed increase in June, raised a total of 1.6 billion yuan, and introduced strategic investors Zhejiang Hangmin. The company successfully completed the issuance of corporate bonds in September 2016, with an actual issuance size of 1.2 billion yuan. Due to the lack of new land and the completion of corporate bond issuance, the company's financial situation improved significantly, with a net debt ratio of-61%, an all-time low in recent years, while short-term debt pressure was 1%, down 86 percentage points from the end of 2015. A good capital structure lays a financial foundation for future international expansion and possible new business models.
Ju Neng City continues to promote, interconnection smart city: the company's future development ideas are gradually clear: 1, actively promote the cooperation of American real estate business platform. Wanxiang USA has rich experience in investing in the United States, and the cooperation with the major shareholder American platform will help to increase investment in overseas real estate, which is expected to form a new growth point and realize the linkage between domestic and foreign markets. 2. Actively participate in the construction of Ju Neng City, a major shareholder. In the next 10 years, Wanxiang Group will invest 200 billion yuan to build a universal innovative energy gathering city, which will include new energy components, batteries, passenger cars and other industries. As the core real estate platform of Wanxiang Group, it will play a core role in the development, construction and future operation of Ju Neng City.
Profit forecast and investment rating: we expect the company's EPS in 16-17 to be 0.32 yuan and 0.40 yuan respectively, maintaining the "overweight" rating.