The fixed increase of the company has been completed and the proportion of shares held by major shareholders has increased. On May 19, 2015, the company announced its non-public offering plan. On July 28, 2016, the company announced that it had been approved by the CSRC for additional issuance, and on November 23, 2016, the company announced that the non-public offering had been completed. The number of shares issued this time is 125 million shares, and the issue price is 15.99 yuan per share. After the completion of this private offering, Shenzhen Jinxin'an will hold 115 million shares of the company, accounting for 24.55% of the company's total share capital. Shenzhen Jinxin'an and Xingning Zhong Yifu will hold 51.58 million shares and 27.49 million shares respectively. Shenzhen Jinxin'an and its actors hold a total of 194 million shares in the company, accounting for 41.49% of the total share capital of the company. Through this decision to increase the shareholders to further strengthen its equity control.
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 November 22, the company closed at 20.67 yuan, corresponding to 15.66 times PE in 2016 and 12.30 times PE 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 20 times PE in 2016, corresponding to the target price of 26.4 yuan.
Risk hint. The recovery of industry fundamentals is not as expected.
