Events:
The company released its 2015 annual report on March 25. During the reporting period, the company realized operating income of 8.136 billion yuan, an increase of 67.75% over the previous year, and realized a net profit of 860 million yuan belonging to the owner of the parent company, an increase of 11.98% over the same period last year. As of December 31, 2015, the company's total assets were 52.184 billion yuan, up 38.37% over the previous year, and the company's net assets were 8.445 billion yuan, up 8.39% from the same period last year.
Viewpoint:
The increase in operating income is relatively large, and the net profit increases steadily. In 2015, the company achieved operating income of 8.136 billion yuan, up 67.75% from 4.85 billion yuan in 2014; net profit belonging to shareholders was 860 million yuan, up 11.98% from 768 million yuan in 2014; and the company's gross profit margin was 28.96%, down 6.83% from 2014, in line with the downward trend of gross profit in the industry as a whole. The company's sales in 2015 were 10.52 billion yuan, up from 6.6 billion yuan in 2014. The company's diluted earnings per share was 0.56 yuan, up 0.06 yuan from 0.50 yuan in 2014.
The sales performance has increased significantly. The increase in operating income and net profit in 2015 is mainly due to the amazing growth in real estate sales, while other businesses have not changed much. During the reporting period, the company achieved a total sales area of 1.114 million square meters, an increase of 66.5 percent over 2014, and sales of 10.52 billion yuan, an increase of 59.3 percent over 2014. The company's accumulated contract rent for real estate rental is about 51.58 million yuan. The company's main business income increased significantly, real estate operating profit increased by 34.06%, but the gross profit margin decreased. In 2015, the company's sales area and sales amount both ranked among the top 100 real estate companies for the first time, of which the sales area rose from 96 in 2014 to 79, and the sales amount rose to 97 from outside the top 100 in 2014.
The collaborative mode releases great vitality. As the real estate development business operation platform of China Cinda assets, the resources of the major shareholder China Cinda Group can provide project and financial support for the company's development. With the help of the platform and resources of China Cinda system, the company has benign coordination and interaction with the group, and the business model and profit model continue to innovate and release great vitality. In terms of business model, with the help of the functional advantages of China Cinda's non-performing assets management, investment and asset management and financial services, the company has changed from the original real estate developer of the whole industry chain to the combination of real estate investors and real estate professional service providers. In terms of profit model, it has changed from simply obtaining project development profits to diversified income from intermediate business such as investment, supervision and agent construction, through the introduction of China Cinda funds, joint establishment of funds and other ways, enhance the company's advantages in investment and financing. At the same time, in terms of special opportunity investment, the company actively participated in collaborative project research and tried the "investment + post-investment management" model.
Diversified financing helps to expand the scale. The company strives to develop diversified financing, optimize the capital structure and reduce financing costs. During the reporting period, the company issued 3 billion yuan of five-year medium-term notes, and the company's refinancing was also progressing smoothly. 3 billion yuan of public corporate bonds and 8 billion yuan of non-public corporate bonds were approved by the CSRC, with a total financing of about 14 billion yuan providing impetus for further scale expansion. In 2016, the company plans to invest 8 billion yuan in land, with a planned new construction area of 1.3 million square meters and a planned completion area of 1.2 million square meters.
Conclusion:
The sharp increase in the company's real estate performance in 2015 led to a sharp increase in operating income and net profit compared with the same period last year. At the same time, the company accelerates the transformation in terms of business model and profit model with the help of the platform and resources of controlling shareholders to promote model innovation. The company's large-scale capital financing also provides a solid cash flow guarantee for the company's business plan and scale expansion in the coming year. We expect the company's operating income from 2016 to 2018 to be 14.644 billion yuan, 19.769 billion yuan and 24.514 billion yuan respectively, and earnings per share of 0.62 yuan, 0.73 yuan and 0.87 yuan respectively, corresponding to PE 9.38,8.04 and 6.70 respectively, maintaining a "highly recommended" rating.
