Event: the company announces the report on the issuance of non-public offering shares and the listing notice.
The subscription at a premium will be completed smoothly. The company announced that the non-public offering of 266 million new shares, the subscription price of 6.01 yuan per share (June 2, 2016 closing price of 5.06 yuan per share), the total amount of funds raised is 1.6 billion yuan, after deducting various expenses, the actual net capital raised is 1.587 billion yuan. The object of the issue is Zhejiang Hangmin Industrial Group Co., Ltd., the stock listing date is June 6, 2016, and the sales limit is 12 months. After the offering, the shareholding of Wanxiang Resources Co., Ltd., the largest shareholder of the company, will be diluted from 68.87% to 61.33%, and Zhejiang Hangmin will hold 10.94% of the listed company, making it the second largest shareholder.
Zhejiang Hangmin is an excellent village-level enterprise group. Zhejiang Hangmin Industrial Group Co., Ltd. is a village-level enterprise group in Zhejiang Province, which is controlled by Hangmin Village. There are 26 wholly-owned, holding and shareholding industrial and commercial enterprises with total assets of 5.4 billion yuan and 12000 employees. Zhejiang Hangmin Co., Ltd., which is controlled by the Group, was successfully listed in August 2004 (Hang Min shares: 600987).
Raise funds to invest in quality projects. The investment direction of the funds raised in this non-public offering is Meizai Meicheng Project, Fuchun Peak View Project, Zerunyuan Phase II and other projects, mainly in the Meizai Meicheng project located near the Olympic plate in Hangzhou. This fundraising will help the company to concentrate resources on the development and construction of various projects, create cost-effective, high-quality ordinary housing, and strive for a better growth trend in terms of market share, sales income, net profit, taxation and so on.
Major shareholder business new ideas, Wanxiang Ju Neng City put on the agenda. The company's 2015 annual report said that it will actively participate in the construction of Ju Neng City, a major shareholder, accumulate experience in the development, construction and management of a new park, strengthen the research on old-age and health-preserving real estate, choose an opportunity to enter the industry, and try to cooperate with insurance capital in joint development. Lu Guanqiu, chairman of Wanxiang Group, has made it clear that "during the 13th and 14th five-year Plan period, Wanxiang will do a major thing, investing 200 billion yuan in ten years to build a Wanxiang innovative energy gathering city." an innovative smart city that brings together power batteries, pure electric buses, new energy passenger vehicles, new energy parts and other projects.
Profit forecast and investment advice. The company's non-public offering was successfully completed and Zhejiang Hangmin subscribed at a premium, demonstrating its confidence in the future development of the company. The company is also actively expanding overseas projects. At present, two projects in the United States have been launched. In addition, if the company actively participates in the construction of Ju Neng City, a major shareholder, and creates an innovative and intelligent city, it is expected to cut into the new energy automobile industry. We estimate that the company's EPS in 2016 and 2017 will be 0.23 yuan and 0.33 yuan respectively. According to the company's stock price of 4.79 yuan on June 13, it corresponds to 20.83 times and 14.52 times of PE in 2016 and 2017, giving the company a price-to-earnings ratio of 30 times in 2016 and a corresponding share price of 6.90 yuan, maintaining the company's "overweight" rating.
Risk hint. The real estate industry faces regulatory risks.
