Main points of investment:
Events. The company publishes its semi-annual report for 2015. During the reporting period, the company realized operating income of 803 million yuan, down 28.1% from the same period last year; net profit belonging to shareholders of listed companies was 32.64 million yuan, down 47.8% from the same period last year; and realized basic earnings per share of 0.03 yuan.
The low carry-over of the company's property in the first half of 2015 reduced revenue by 28% and net profit by 47.8%. In the first half of 2015, the company achieved a contract sales area of 61300 square meters, with a contract sales amount of 1.052 billion yuan, an increase over the same period last year. In the first half of the year, the company achieved a construction area of 2.3383 million square meters. In the first half of the year, the company's Meitang Jiayuan project has achieved opening sales.
Since 2015, the company has obtained two land reserves, with a total of 190000 square meters of rights and interests. In 2015, the company plans to achieve operating income of not less than 4.1 billion yuan, an increase of no less than 30%.
Investment advice: the company is expected to expand in different places and maintain its "overweight" rating. The company's real estate business is all concentrated in Tianjin, covering commercial housing, indemnificatory apartment and first-class land development business. Since last year, the company began to increase the reserve of indemnificatory apartment project (involving the construction of 1.2 million square meters on behalf of indemnificatory apartment). At present, the total construction area of the company's rights and interests is 4.37 million square meters (not considering the Hangu Hexi land consolidation project of 1700 mu), which can meet the development of the company in the next three years. In the context of real estate regulation, the company is cautious so that its debt and cash flow are good, while the advance income per share is higher. We estimate that the company's EPS in 2015 and 2016 will be 0.19 yuan and 0.24 yuan respectively, and the corresponding RNAV will be 6.66 yuan. As of Aug. 31, the company closed at 4.79 yuan, corresponding to 25.2 times PE in 2015 and 20.0 times PE in 2016. Give the company RNAV as its target price, corresponding to the target price of 6.66 yuan, to maintain the company's "overweight" rating.
Risk hint: the industry faces two major risks: interest rate hike and policy regulation.
