Main points of investment:
The company publishes its semi-annual report for 2017. During the reporting period, the company realized operating income of 559 million yuan, an increase of 24.1% over the same period last year; the net profit belonging to shareholders of listed companies was 448 million yuan, turning losses into profits over the same period last year; and realizing basic earnings per share of 0.48 yuan.
In the first half of 2017, due to the increase in property carry-over, the company's revenue increased by 24.1%. In the same period, the transfer of shares in the company turned net profit back to profit. From January to June 2017, the company signed a relevant cooperation framework agreement with the Management Committee of Jiangxi Fuzhou High-tech Industrial Development Zone and Zhuolang Science and Technology. The tripartite cooperation established the project company Jiangxi Songjiang Smart City Construction and Development Co., Ltd. (registered capital is 1.3 billion yuan, the company subscribed to 676 million yuan, accounting for 52% of the project company), using the project company as the investment platform Actively promote the development and construction of Fuzhou Cloud Computing data Center, Information Technology Industry Park and livable living facilities projects. During the reporting period, Tianjin Hengtai Huijin Financial Leasing Co., Ltd., a subsidiary of the company, signed three financial leasing project contracts and completed 648 million yuan of financial leasing business. In October 2015, the company established Tianjin Songjiang Wealth Investment Partnership (Limited Partnership) as a partner with Tianjin Binhai New area Wealth Management Co., Ltd., with an additional contribution of 4 million in the first half of 2017. From January to June 2017, Tianjin Hongqiao Wealth Venture Capital Co., Ltd., an angel fund set up by the company and Tianjin Huixin Wealth Equity Investment Fund Management Co., Ltd., Tianjin Songjiang Wealth Investment Partnership (Limited Partnership), won the participation of Tianjin Science and Technology Commission Angel Investment guidance Fund, with a capital scale of 35.35 million yuan, of which the M & A fund contributed 10 million yuan.
In February 2017, the company signed the "Major Asset restructuring Framework Agreement" with the relevant shareholders of Zhuolang Technology. In April 2017, the company disclosed a "major asset purchase and related party transaction plan" to acquire an 80% stake in Zhuolang Technology for 1.184 billion yuan. In June 2017, the company signed a "Strategic Cooperation Agreement" with Huawei and other three parties to jointly develop the field of smart cities. In July 2017, the company obtained the construction area of 65000 square meters of underground parking lot in Nankai District of Tianjin.
Investment advice. Create a new model of real estate plus smart city, actively expand to financial leasing, health care, equity investment, and maintain the "overweight" rating. With the help of major shareholder trunk construction and first-level development strength (which helps the company to obtain secondary development projects at low cost), the company's real estate has formed a high-end market model for regional development along the trunk line. In addition to maintaining the competitive advantage in the suburbs of Tianjin, the company also expands non-local projects through the advantage of major shareholders. We believe that the current project reserve rights and interests of the company are 3.37 million square meters, which can meet the development in the next three years. At present, the company is building a new model of real estate plus smart city, actively expanding to financial leasing, health care, and equity investment. At present, the company's RNAV is 8.13 yuan per share. It is estimated that the company's EPS in 2017 and 2018 will be 0.73 and 0.28 yuan respectively. Consider the company's business situation, give the company RNAV as the 6-month target price, that is, 8.13 yuan, maintain the "overweight" rating.
Risk Tip: the company is facing the risk that the lease and sale is not as expected.