The sharp improvement in the first three quarters of 2016 is mainly due to the continued boom in the company's main real estate industry.
The real estate market in the third quarter continued the hot situation in the first half of the year. In the case of a sharp decline in the contracted sales area of commercial housing (16600 square meters,-54.27%), the sales amount still reached 264.4725 million yuan, + 95.41% compared with the same period last year. In addition, with the introduction of the top-level design of the housing rental market, the company achieved rental income of 11.3963 million yuan in the first three quarters.
During the reporting period, the company actively promoted the progress of pension business, and Wuxi Yikang, the first pension real estate project created by the company, formally signed the "Phoenix Yikang Community Consulting and Consulting contract" with Taiping Watermark Endowment Enterprise Management Co., Ltd. it makes the company take an important step in the transformation of pension strategy. This cooperation will introduce the rich experience of China's Taiping pension insurance operation and investment in the pension industry and the advanced pension community development and management experience of the American Watermark Company, and achieve a strong combination in the field of the pension industry, focusing on building a high-quality pension community.
Profit forecast and investment advice: the company's performance improved significantly during the reporting period, mainly due to the good sales performance of the company's real estate business, resulting in a substantial increase in operating income and net profit. At the same time, the company continues to promote the pension real estate, actively introduce old-age management technology, combined with its own advantages in real estate is expected to achieve a smooth transformation. It is estimated that the company's EPS from 2016 to 2018 will be 0.20, 0.19 and 0.21, respectively, and the current share price will be rated as "overweight" corresponding to PE in 38-40-37.
Risk hint: pension projects do not meet expectations, and the real estate boom falls back.