Main points of investment
Our point of view: the performance of China Merchants Land has entered a stable release period, and the scale of sales has increased year by year, and will reach a scale of about 20 billion yuan in 2017. The cities chosen by the company, such as Nanjing, Chongqing, Guangzhou and Foshan, all have very good markets. As the only overseas listing platform for investment promotion Shekou, the company will actively explore the business of "light assets" in the future. With the help of the abundant resource advantages of investment promotion Shekou, give full play to its role as an overseas listing platform. Investors are advised to pay attention to the company's current stock price, which is equivalent to 6.7 times PE in 2016, with a dividend yield of more than 3%.
The annual results were in line with expectations, with a substantial increase in dividends: the operating income of China Merchants Land in 2016 was 11.61 billion yuan (the same below), an increase of 81.5% over the same period last year; the gross profit was 3.337 billion yuan, an increase of 114.3% over the same period last year, and the gross profit margin was 28.8%. An increase of 4 percentage points over the same period last year The net profit belonging to the shareholders of the company was 811 million yuan, an increase of 337.6% over the same period last year. The sharp increase in net profit was mainly due to the substantial increase in the number of projects completed and delivered during the year. The company's final dividend rose sharply to 4.5 Hong Kong cents, the dividend yield increased to 27% of net profit, and the dividend yield exceeded 3%.
Sufficient land reserve: by the end of 2016, the company's total land reserve has reached 6.1 million square meters. Divided by city, the proportions of Chongqing, Foshan, Nanjing & Jurong, Guangzhou and Xi'an are 51%, 18%, 12%, 11% and 8%, respectively. Enough for the company's development in the next 3-4 years. In the layout of regional development, the company ploughed Foshan, Nanjing and other key cities, 2016 company acquired two new projects, respectively located in Foshan and Nanjing, with a total construction area of 340,000 square meters. The division of the industry will strengthen in 2017, and the company has a good opportunity to acquire land and is expected to spend 10 billion yuan on new land projects.
Financial stability: the company had 5.81 billion yuan of cash on hand at the end of 2016, an increase of 57.2% over the same period last year, with sufficient cash; the net debt ratio in 2016 decreased by 6 percentage points year-on-year to 63.1%, which is at a low level in the industry. Affected by the fluctuation of RMB exchange rate, the company lost 213 million yuan in exchange in 2016. At present, the total interest-bearing liability is 12.38 billion yuan, of which US dollar debt accounts for 45%. In the future, the company will reduce the proportion of US dollar debt through a variety of channels and reduce the impact of RMB exchange rate fluctuations.
Risk tips: macroeconomic growth slows, industry restrictions are tightened, and company sales fall short of expectations.