Event
Crown Castle International Corp Chase announced that according to the preliminary estimates of the financial department, the company is expected to achieve a net profit of 250-300 million yuan (based on the company's total share capital of 1492110725 shares, earnings per share is about 0.17-0.20 yuan) in the first quarter of 2017, a substantial increase over the same period last year. Net profit belonging to shareholders of listed companies in the same period last year: 1.1846 million yuan; earnings per share: 0.0008 yuan.
Comment
1. The first-quarter results increased by more than 200 times compared with the same period last year, and the Beijing project with high gross margin entered the settlement period. From January to March 2017, the company is expected to achieve a net profit of 250-300 million yuan, which is not only a sharp increase of 210-250 times over the same period last year, but also close to the net profit of 320 million yuan for the whole year of 2016. The company's performance increased significantly in the first quarter, mainly due to differences in the settlement cycle and regions of the real estate project. The company's main real estate settlement project is the Beijing Baiwang Xinglin Bay project, and the settlement income of this project is expected to be about 1.3 billion yuan. the gross profit margin is higher than the main settlement items in the same period last year; at the same time, the settlement area of real estate business also increased compared with the same period last year, and the settlement income increased significantly over the same period last year.
two。 The settlement performance has greatly increased and the exclusive recommendation logic has been realized, and the annual performance has been greatly determined. We released the company's annual report comment depth report "Real Estate settlement is expected to increase, Lithium Battery will be put into full production soon" on March 16, 2017. the proportion of development interests in the company's Northwest Wang and Baiwang projects in Beijing has been raised to 73.82% and 81.5% respectively. Gradual completion this year and next is expected to usher in a carry-over peak. At present, the average price of second-hand housing is more than 70, 000 yuan per square meter, with a settlement area of 300000 square meters. The settlement value of equity can reach 16.5 billion yuan, superimposed with the low base background of the previous two years to ensure the release of performance this year and next. The company's quarterly results significantly exceeded market expectations, but in line with our logic and judgment, we believe that the company's annual results are more certain.
3. The lithium battery business is about to be put into full production, and the new chairman brings a new look. This year, the company has accelerated the transformation of the new energy lithium battery industry. At present, it has completed the purchase of the plant and the introduction of the technical R & D team, and the manual battery pack of power lithium battery PACK has begun small batch trial production and sale. PACK automatic production line, cell pilot R & D line and cell production line are being stepped up and are expected to be fully put into production in the second quarter of 2017. as the company has established a joint venture with Fujian Province to obtain orders. It is expected to dock with the state-owned new energy car manufacturers in the province, and the production line is expected to contribute nearly 100 million yuan in net profit after delivery. In addition, Mr. Han Xiaohuang became the chairman of the company in January 2017 and is expected to promote the business development of the company in an all-round way.
Reiterate the buy rating
With the new chairman taking office in 2017, we believe that the company is a very high-quality target for real estate transformation:
1) the Nantong project has made provision for inventory price decline in the past few years, while the Beijing housing project with high gross margin will enter the completion period this year and next year, and will greatly increase the proportion of development rights and interests in October last year, and the settlement performance is expected to exceed expectations.
2) in January this year, the company continuously announced the promotion of the new energy transformation business, and the annual report also put the business status ahead of the real estate business for the first time to show the transformation determination. The battery pack production line operated by the joint venture with Fujian Province was put into production this year, and the net profit is expected to contribute 100 million yuan after delivery.
3) the average price of the previous two rounds of employee stock ownership plan is 7.67 yuan / share and 7.34 yuan / share respectively, which is bound to multi-interests, providing a margin of safety. We are optimistic about the release of the company's performance this year and the positive promotion of the transformation business, maintaining the target price of 9.10 yuan per share, equivalent to a 20% RNAV discount, and reiterating the buy rating.
