Main points of investment:
Events. The company released its quarterly report for 2017. During the reporting period, the company realized operating income of 289 million yuan, an increase of 79.7% over the same period last year; the net profit belonging to shareholders of listed companies was 423 million yuan, turning losses into profits over the same period last year; and realizing basic earnings per share of 0.45 yuan.
In the first quarterly report of 2017, driven by the increase in carryover, the company's revenue increased by 80%. Driven by the investment income from the transfer of equity, the company's net profit turned from loss to profit. In February 2017, the company signed the "Major Asset restructuring Framework Agreement" with the relevant shareholders of Zhuolang Technology. In April 2017, the company disclosed a "major asset purchase and related party transaction plan" to acquire an 80% stake in Zhuolang Technology for 1.184 billion yuan.
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 for real estate development, 686 million yuan for Internet investment and 228 million yuan for equity investment. will continue to increase investment in Wutai Songjiang City, Golf Town, Tuanpo West District Songjiang Star, Donghu Town, Southeast Corner Project, Guangxi Qinzhou Ningyue Garden, Ningyue Dongyuan, Jiangxi Fuzhou Project and other projects. At the same time, we will timely increase the scale of investment in smart cities, the Internet and other areas. The company plans to start its real estate business in 2017 with an area of 27.54 million square meters, a completed area of 2445 thousand square meters, a contracted sales area of 13.48 million square meters, and contracted 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 (which helps the company to obtain secondary development projects at low cost), 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 company's EPS in 2017 and 2018 will be 0.57 and 0.24 yuan. 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 real estate industry faces regulation and hindrance to corporate transformation.