Main points of the report
Event description
Chongqing Development (000514) today announced the 2015 annual report, the main contents are as follows: the company realized operating income of 1.155 billion yuan, down 40.68% from the same period last year, net profit of 7 million yuan, down 93.98% from the same period last year, and net profit margin of 0.64%, down 5.65% from the same period last year, EPS 0.01yuan. Among them, the operating income in the fourth quarter was 422 million yuan, down 27.23% from the same period last year, the net profit was-17 million yuan, down 1487.23% from the same period last year, and the net profit margin was-4.05%, down 4.26% from the same period last year, and EPS-0.02 yuan.
Event comment
De-chemical slowdown superimposed last year's settlement peak, the company's performance declined. The company's 2015 operating income and net profit decreased by 40.68% and 93.98% respectively compared with the same period last year, mainly due to: (1) the company's main project "Mountain and City" entered the settlement peak in 2014, which pushed the company's revenue to double and reach a record high. After the project entered 2015, the situation slowed down, and the company's operating income declined significantly. (2) interest capitalization stopped after the completion of "Mountain and City" and other projects, resulting in a substantial increase in the rate of financial expenses by 4.96 percentage points. However, with the improvement of the inventory situation in Chongqing, we are optimistic about the future performance of the company.
Chongqing to improve the inventory situation, the company's future sales situation is promising. Since the end of 2014, the sales area of commercial housing in Chongqing has obviously exceeded the new salable area, new construction area and completed area, and the inventory situation of the property market in Chongqing has gradually improved. At present, the company's main projects are Yunling, Mountain and City in Nanan District, and Grammy City in Xiyong Software Park. The project is of superior location and good quality. Under the improved inventory situation in Chongqing, the benefit of the company will be more obvious.
The debt ratio is low and the financial position is sound. By the end of 2015, the company's asset-liability ratio was only 54.76%, and the net debt ratio was only 14.40%, both of which declined for two consecutive years and were low in the industry. The ratio of monetary funds to (short-term loans + long-term loans due within one year) is about 0.94, which is generally within a reasonable range.
The Sino-Singapore cooperation project has been settled in Chongqing, and the company has the expectation of land revaluation. In November 2015, President Xi Jinping visited Singapore and the two countries issued a joint statement proposing that the third cooperation project between the two governments would be located in Chongqing, focusing on the development of finance, aviation, transportation and information and communications industries. After the substantive landing of the China-Singapore cooperation project, the company has the expectation of land revaluation in the projects such as Jiangbei Airport, Xinghe One near Xiyong Software Park and Grammy City.
For the first time, coverage gives a "buy" rating. We expect the company's 2016 results to benefit from the improvement in the Chongqing property market, with an EPS of 0.26 yuan per share in 2016 and 0.30 yuan per share in 2017, with a "buy" rating of 33.95 and 29.85 times the previous share price PE for the first time.
Risk hint: Chongqing property market inventory, China-Singapore cooperation project landing is not up to expectations.