Main points of investment:
Events. The company publishes its 2016 annual report. During the reporting period, the company realized operating income of 1.99 billion yuan, a year-on-year increase of 214.1%; net profit belonging to shareholders of listed companies-455 million yuan; and basic earnings per share-0.49 yuan.
In 2016, the company achieved 1599,000 square meters of new construction, an increase of 0.6% over the same period last year. In 2016, the company reached a contracted sales area of 2444 million square meters, an increase of 187.5 percent over the same period last year, and contracted sales of 2.349 billion yuan, an increase of 177.9 percent over the same period last year. In 2016, the company's Tianjin Hengtai Huijin Financial Leasing Co., Ltd. completed 795 million yuan in financial leasing business during the reporting period, an increase of 89.3% over the same period last year. In May 2016, the company transferred the project under construction and withdrew 184 million yuan. In July, Tianjin Songjiang Co., Ltd., a subsidiary of the company, signed a smart city strategic cooperation framework agreement with the Management Committee of Jiangxi Fuzhou High-tech Industrial Development Zone and Tianjin Zhuolang Science and Technology Development Co., Ltd. In October, the company agreed to the "proposal on the Investment Plan of Fuzhou Cloud Computing data Center and Smart City Construction Project" and signed the "contract for Investment and Establishment of Enterprises in Fuzhou High-tech Industrial Development Zone". In August, the company transferred the Tianxi Park project under construction, withdrawing 184 million yuan of funds. In August, the company transferred the waterfront Tianyuan project under construction, withdrawing 725 million yuan of funds. In November, the company plans to transfer the No. 4 Di Yishan County project in Tuanpoxi District, Jinghai County, withdrawing 628 million yuan. In May, Tianjin Canal City Investment Co., Ltd., a subsidiary of the company, invested 6.8 million to establish Tianjin Wuqing Chaoju Eye Hospital Co., Ltd. In August 2016, the company invested 6.8 million yuan to buy a 34% stake in Tianjin Wuqing Chaoju Eye Hospital Co., Ltd. In October 2015, the company established Tianjin Songjiang Wealth Investment Partnership (limited partnership) as a partner with Tianjin Binhai New area Wealth Management Co., Ltd., with an additional contribution of 40 million yuan. In February 2017, the company signed the "Major Asset restructuring Framework Agreement" with the relevant shareholders of Zhuolang Technology.
According to the company's 2016 annual report, the company plans to invest about 2.366 billion yuan in 2017, including 1.452 billion yuan in real estate development, 686 million yuan in Internet investment and 228 million yuan in equity investment. In 2017, the company plans to start construction area of 27.54 million square meters, completed area of 2445 million square meters, signed sales area of 13.48 million square meters, signed sales of 1.406 billion yuan.
Investment advice. Expand financial leasing, health care and equity investment business, and maintain the "overweight" rating. With the help of major shareholder trunk construction and first-level development strength, the company's real estate has formed a high-end market model for regional development along the trunk line. In addition to maintaining the competitive advantage in the suburbs of Tianjin, the company also expands non-local projects through the advantage of major shareholders. We believe that in the future, the company will attach importance to the balanced development of regions and product types. At present, the company's project reserve rights and interests are 3.37 million square meters, which can meet the development in the next three years. At present, the company is actively expanding into financial leasing, health care, equity investment and smart cities. At present, the company's RNAV is 8.13 yuan per share. It is estimated that the EPS of the company will be 0.03 and 0.10 yuan in 2017 and 2018. Consider the company's business situation, give the company RNAV about 10% discount of the 6-month target price, that is, 7.32 yuan, maintain the "overweight" rating.
Risk hint: the industry faces two major risks: interest rate hike and policy regulation.