Main points of investment:
Maintain the overweight rating with a target price of 22 yuan. Maintain the company's 17-year EPS1.63 and 2.05 yuan (before fixed increase) forecasts of 255% and 26%, respectively. The company as the only listed company platform under the major shareholders, after the increase, the endogenous development power will be enhanced, and the development will enter the fast lane. The follow-up of the first-level land development project in Xingning City will enter the transfer stage, and the high performance growth can be expected.
Maintain the company's overweight rating with a target price of 22 yuan, corresponding to an increase of 13.5 times PE before 2016.
The performance in the first half of the year is stable and the accelerated release is just around the corner. The company's operating income in the first half of the year reached 114 million yuan, an increase of 189.2% over the same period last year, mainly due to the change in the subject of investment compensation special fund income; the return net profit increased by 0.72% to 122 million yuan over the same period last year. The asset-liability ratio is 9.8%. As the first-level land development project in Xingning City gradually enters the transfer stage in the second half of the year, the company's performance release will accelerate, and we maintain the forecast of high performance growth for the whole year. With the continuous growth of urban expansion demand in Xingning City, it is estimated that the average annual contribution of land transfer income will be 2.4 billion yuan in the next five years.
Fixed increase to enhance the driving force of development, diversified expansion can be expected. The market expects that the main business of the company is not clear, and the sustainability of first-level land development is in doubt. We believe that the company is gradually accumulating experience in PPP cooperation with the government to lay the foundation for obtaining a larger volume of first-class land development projects in the future. Considering the abundant cash on hand, the trend of diversified expansion will be accelerated in the future. After the fixed increase of major shareholders (the equity ratio is raised to about 42%), the determination and support for the development of the company will be fully released, and the development is about to enter a new chapter. The development model is gradually clear, with the PPP project as the main body to obtain stable cash flow and performance, diversified development as the wing, the expansion of emerging industries to open the future growth space, pull up the current low valuation level.
Risk hint: there is some uncertainty in the coordinated development of major shareholders and the first-level land development business.
