Event
According to the company's semi-annual report for 2016, due to the decrease in sales revenue, the operating income was 230 million yuan, a decrease of 32% compared with the same period last year. The net profit attributed to the parent company was-136 million yuan, a sharp drop of 716% compared with the same period last year. The company successfully issued the first issue of 400 million yuan of corporate bonds in July.
Take advantage of the hot sales this year to increase the residential development projects in Tianjin and Chengdu.
Affected by the development effect of first-tier cities and Beijing-Tianjin-Hebei since the beginning of this year, the company seized on the good market situation in Tianjin and increased the sales and elimination of built inventory in area An of the Yangliuqing project, with a subscription amount of more than 100 million yuan and selling 6013 square meters as of June. At the same time, the plan of area B of the project has been readjusted according to market conditions, and the adjusted plan will be mainly based on low total price products of small households. In addition, in the part of the hotel, the company also intends to introduce Club Med and reached a preliminary cooperation intention with the other party, and the plan is currently being communicated with the competent government departments for approval; in the first half of the year, some products of Chengdu Jinshang project are better than those of the same period last year, with sales of 5312 square meters.
Continue to practice the light asset model, and major properties are under renovation and upgrading.
The former Huatang shopping mall of Beijing Sunshine Building was successfully transformed into an office building at the end of 2015. at present, the rental progress has been affected by changes in the main tenants, with an occupancy rate of only 33% in the first half of the year. At present, the company has reidentified the main tenants, and is expected to make a breakthrough in the third quarter. In view of the best office market environment in Beijing, Jishi will increase a lot of rental income for the company.
Plan to sell and withdraw from major projects, bringing more than 2.5 billion yuan of cash flow to the company
1) the company intends to cooperate and transfer the Shanghai Yinhe Hotel project, which is currently in negotiations with a number of interested parties, considering that the project was acquired at the end of 2013, when the purchase price was 1.69 billion yuan, and according to the renovation cost, about 500 million yuan was calculated. we expect that the sale of the project will bring the company at least nearly 2.5 billion yuan in cash. 2) in view of the continuous losses of the Tianjin Luyou Tiandi Project, which is a joint venture with Mitsubishi Corporation, since its opening, the company and the landlord Tianjin Teda terminated the overall lease agreement ahead of schedule on July 31. The lease agreement was terminated ahead of schedule; 3) the company is also communicating with the landlord Shanghai Jinjiang and small tenants on the loss-making Shanghai Huaihai Road project.
The company is valued at 58.7-7.3 billion yuan, the current market capitalization is 4.7 billion yuan, and there is a poor expectation of transformation, so it is given a buy rating.
We estimate that the company has a valuation of 58.7-7.3 billion yuan, and the current market capitalization is only 4.7 billion yuan. Considering that the company had planned to inject sports and Olympic power under Chinese culture, despite its failure, it has released the expectation of transformation, and there is a great gap in expectation. Give a buy rating. We give the target price range according to the income method and 10% discount on revaluation, corresponding to 7.83-8.76 yuan.
Risk tips: commercial real estate environment downward, residential development provision for large-scale impairment.
