Shunfa Hengye released its 2016 annual report, with operating revenue of 3.64 billion, up 4.6% from the same period last year, and net profit attributable to the parent company of 370 million, up 12.1% from the same period last year.
Comply with the trend and move forward: the company achieved a total settlement area of 202000 square meters in 2016, of which the Zhejiang region accounted for 88%. The profit growth rate higher than the operating income is mainly due to the improvement of profit margin. In 2016, the comprehensive gross profit margin was 28%, an increase of 2% over the same period last year. It is also the first profit margin improvement since 2012. The main theme of Shunfa in 2016 is "comply with the trend and accelerate inventory demolitions". Combined with the heat of the G20 summit in Hangzhou, the sales volume for the whole year was 3.67 billion, with a sales area of 218000 square meters, down 30% and 35% from the same period last year. The overall lower-than-expected total sales is mainly due to the company's low supply of goods available for sale, but the overall removal rate remains high, and the average sales price increases by 9% compared with the same period last year, considering that the company's available resources continue to decrease. In the future, we still need to pay attention to the progress of further restocking.
Healthy cash flow and looking forward to the transformation: the company has no new projects in 2016. At present, the planned area under construction is 890000 square meters, and the land reserve is mainly concentrated in Huainan, Anhui Province. the company said in its annual report that it will still pay close attention to the dynamics of the land market and appropriately increase the land reserve. In 2016, the company successfully completed the fixed increase and corporate bond issuance, privately issued 266 million new shares, issued a subscription price of 6.01 yuan per share, raised a total of 1.6 billion yuan, and introduced strategic investor Zhejiang Hangmin. At present, the loan balance is 2.9 billion, the overall financing cost is about 5%, and the company's net debt ratio is-71%, which has reached an all-time low in recent years. A good capital structure lays a financial foundation for future international expansion and possible new business models.
Tracking Juneng City, connected Smart City: the company's long-term development strategic goal since 2016 is clearly defined as: to build the real estate construction of collective industries (environmental protection, energy conservation, intelligence, technology), resources and innovative life as the goal, casting the Shunfa Hengye brand means that the company will not only be a residential developer in the future. 1. Actively promote the cooperation of American real estate business platform. 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 17-18 to be 0.17 yuan and 0.21 yuan respectively, maintaining the "overweight" rating.