Event: the company released its annual report on the 13th, with a total operating income of 9.77 billion, + 143.46% year-on-year, 244 million net profit belonging to shareholders of listed companies,-12.38% year-on-year, and basic EPS0.23 yuan, down 11.54% from the same period last year.
The gross profit margin fell, taxes and surcharges increased sharply, and the net profit loss expanded after deducting non-profit. In 2016, Kunming Lake, Artist Park, Upper East Avenue and new M & A projects were settled one after another, realizing real estate settlement income of 9.5 billion (+ 272% compared with the same period last year). However, due to the drag of projects in Kunming and Dali, the company's gross profit margin decreased by 6.65. during the reporting period of pct;, due to business reform, new policies and new projects were brought into the scope of merger, resulting in a substantial increase in taxes and additional, resulting in operating profit losses. The company obtains 772 million of the non-operating income recognized by the subsidiary and the joint venture (286% of the net profit), if the net profit of the non-later company is deducted from the actual loss of 365 million yuan (the previous loss is 181 million yuan).
The quality of the project structure is optimized and the burden is reduced. In 2016, the company's sales amount was 5.165 billion yuan (+ 29.4%), the sales area was 6.196 billion yuan, and the average sales price was 8336 yuan per square meter. the main sales areas were distributed in Chongqing (7%), Dali (6%), Xi'an (24%) and Kunming (61%). The southwestern region sold smoothly.
In 2016, the company acquired a series of Yintai projects and Hangzhou ideal with 1.86 billion in cash, adding 13 new projects and adding 94.91 million square meters of commercial complex area (2924 million square meters of sales properties and 6567 million square meters of holding properties), enriching the format of urban complex properties and completing the layout of mainstream cities such as Beijing, Hangzhou, Ningbo, Xi'an, Lanzhou and Chengdu. By the end of the year, the area of land to be developed by the company has reached 9.78 million square meters. In the past, the malpractice of excessive concentration of goods in the southwest region has been improved, and it is expected that the gross profit level will gradually improve in the future.
The opening of the Shanghai-Kunming high-speed railway coincides with the recovery of the third and fourth lines, which has taken on a new look this year. With the opening of the Kunming-Shanghai high-speed railway in 2016 and the promotion of "Belt and Road Initiative", tourism consumption and industrial introduction in Yunnan will be greatly improved. The company is actively building an industrial linkage business model of residential complex, tourism real estate and pension real estate, and has completed the layout of tourist destinations in Yunnan and along the Lancang-Mekong River, such as Shaanxi, Sichuan and Lancang-Mekong. In terms of pension and health services, the company has launched pilot projects such as Dali Oriental and Qingchengshan in Sichuan, and the transformation of "Great Health" and "Great Leisure" has been smooth. In line with the recovery of third-and fourth-tier cities this year, the company's profitability is expected to take on a new look this year and next year.
Investment advice: the annual report reveals that the company has planned income of 10 billion yuan and planned investment of 18 billion yuan in 2017. Relying on the resource advantages of Yunnan SASAC, the company has advantages in project acquisition and resource integration (last year's low-cost acquisition of project M & An opportunities is an example). In addition, the business types of Yunnan SASAC and Yunnan City Investment are similar, and there are many resources or assets with the possibility of business coordination, which is conducive to the transformation of pension and tourism real estate. We expect the company's EPS to be 0.34,0.41 and 0.72 in 2017-2019, maintaining a "buy-A" rating and a six-month target price of 7.54 yuan.
Risk hint: performance continues to be depressed and gross profit margin has not yet recovered through the inflection point, suppressing valuations.
