Items:
The company announced that in the first three quarters of 2016, operating income reached 1.78 billion yuan, an increase of 87.9% over the same period last year, and the net profit belonging to shareholders of listed companies was 10.635 million yuan, an increase of 109.2% over the same period last year, achieving EPS0.0069 yuan, in line with expectations.
Peace viewpoint:
The performance continued to improve and the advance payment was sufficient: during the period, the company achieved revenue of 1.78 billion yuan, an increase of 87.9% over the same period last year, and a net profit of 10.635 million yuan, an increase of 109.2% over the same period last year. The proportion of business taxes and surcharges in revenue decreased by 27.8 percentage points to 9.1% compared with the same period last year, and the impact of taxes and fees gradually weakened. Due to the difference in settlement structure, the gross profit margin fell 27 percentage points to 17.7% compared with the same period last year; the expense rate fell 4.34 percentage points to 9.4% during the period. Judging from the cash received for selling goods and providing services, the amount of real estate contracts signed in the first three quarters was 2.16 billion yuan, an increase of 49.3% over the same period last year, and the final advance payment increased by 50.7% to 1.09 billion over the beginning of the year, laying the foundation for future performance growth. At the end of the period, after excluding advance receipts, the asset-liability ratio is 69.1%, and the coverage rate of monetary funds to short-term liabilities is 111.3%. The financial situation is relatively sound.
Strengthen the integration of shareholder resources and layout of cultural and creative industrial parks: during this period, the company actively promotes cooperation with China Power Construction member enterprises and strengthens the use of internal land resources. The company signed a "cooperation memorandum" with Hubei Electric Power Construction No. 1 Engineering Company, and the two sides reached a cooperation intention on the transformation and utilization of old factory resources under the provincial power construction company, and the creation of industrial parks such as cultural creativity and innovative industries. Previously, the company has signed a cooperation agreement with Chinese and Indian culture. In the future, South China will provide operational capacity, China and India will provide creative design, China Electric Power Construction will provide factories and other land resources, and the model of jointly building a cultural industrial park is worth looking forward to.
The PPP expansion model is worth looking forward to, and the reform of the central enterprises will benefit from the target: after Dianjian Real Estate was owned by the end of 2012, the company Huaju turned into a real estate listing platform under the central enterprises. China Electric Power Construction has a large number of urban infrastructure projects in the country. In the future, relying on China Electric Power to build urban rail transit PPP project, it is worth looking forward to promoting the business layout of major urban traffic nodes. At the same time, as the only real estate listing platform under the power construction company, there is room for imagination in both asset integration and capital operation under the background of the integration of central enterprises.
Maintain the recommended rating. From 2016 to 2017, the company's EPS is expected to be 0.22 yuan and 0.32 yuan respectively, and the current share price is 26.1 times and 17.7 times PE respectively. The company's main real estate business has benefited from the rebound of the Wuhan regional property market, actively exploring the layout of cultural and creative industries; relying on the resources of the major shareholder Power Construction Group, the PPP expansion model is worth looking forward to; at the same time, under the background of the integration of central enterprises, as the only real estate listing platform of the Power Construction Department, there is more room for asset integration and capital operation imagination, maintaining the "recommended" rating.
Risk tips: performance and sales fall short of expectations; cultural industry expansion falls short of expectations.
