Main points of investment
The assets of Huangting Square are of high quality and are the preferred target under the background of asset shortage. The company is a real estate company mainly engaged in self-owned business. the core asset is the Huangting Plaza, which is located at the core of Futian in Shenzhen. The square has a construction area of 810,000 square meters. The average daily passenger flow of the square has stabilized at about 45000 in 2015, and the rental income has reached 180 million yuan. Coupled with 56 million income from management, water and electricity, the overall annual revenue of Huangting Plaza is 240 million yuan, accounting for nearly 90% of the total operating income. The current opening rate of the square is 64%. We believe that the company's rental income will continue to increase significantly in the future with the increase in the number of contracted merchants, the increase in the opening rate and the rise in rental prices. We measure the company's RNAV14.2 yuan, which provides a strong margin of safety for the current stock price. The company has high-quality commercial property in the front-line core area, and its cash flow is growing steadily, which is in line with the current theme of asset shortage.
The transformation of "light assets" provides a broad space for development. According to the company's development strategy, in the future, the company will be guided by the light asset model, with the main layout of real estate operation and management services, financial services, children's themes, entertainment themes and timely lifestyle content services and other business sectors. to build the company into "China's leading real estate integrated solution provider, the leading brand in the field of real estate integrated services". The company's acquisition of the Royal Court Hotel Company in June 16 is expected to improve the company's performance, and with the management services of the Royal Court apartment, Shaddock Bay Resort and Qingqing World, the company is expected to expand in the areas of light assets such as management services and theme parks.
We will accelerate the layout of financial services and open up new profit growth points. In 2016, the company acquired shares in the concentric fund through equity acquisition and became its largest shareholder, indirectly obtained the micro-re-loan business license, and the cumulative loan balance of concentric re-lending exceeded 2 billion since its inception, which is expected to create a new profit point for the company. it also marks a substantial breakthrough in the construction of the financial services strategic system of Huangting International. In addition, the company acquires and injects capital to acquire a controlling stake in the Internet innovation enterprise "Microinsurance Company" to enter the field of insurance payment and Internet insurance. The company's layout in the big financial field has achieved initial results and broad prospects.
Investment advice: the company is sitting on high-quality commercial assets in the core areas of first-tier cities, with excellent quality; at present, RNAV14.2 per share provides a strong margin of safety for the current stock price. The company is expected to continue to benefit from the Shenzhen real estate fundamentals long-term upward, the intrinsic value continues to thicken, is the preferred target under the background of asset shortage. The company's transformation in the field of light assets has achieved initial results and has a broad space. The company is expected to achieve EPS of 0.48 and 0.77 yuan in 2016-2017, corresponding to PE of 27.9 and 17.4 times, respectively.
Risk hint: monetary policy is tightening; real estate fever in first-tier cities is declining.