1H17 performance increased by 6.7% year-on-year, in line with expectations
Pudong Jinqiao announced 1H17 results: operating income 810 million yuan, an increase of 4.3% over the same period last year; net profit belonging to the parent company was 370 million yuan, an increase of 6.7% over the same period last year, corresponding to 0.33 yuan per share, in line with market expectations.
The main business operation is relatively stable: the company's real estate sales settlement income during the period was 120 million yuan, rental income was 620 million yuan, and hotel apartment income was 72.56 million yuan, with year-on-year changes of-17.5%, 9.4% and 6.4% respectively. The comprehensive rental rate of the leasing business during the period was 83.7% (excluding hotels), the same level as in the same period last year. The company's comprehensive after-tax gross profit margin was 62.9%, up 5.0 percentage points from the level of 57.9% for the whole of last year.
Investment income has declined: the investment income recorded during the period was 37.46 million yuan, down 40% from the same period last year, mainly due to the receipt of 24.89 million yuan in dividends from Oriental Securities during the period, down significantly from 58.08 million yuan last year.
The net debt ratio is still at a low level: the company's net debt ratio at the end of the period is 36.9%, which is 1.2% lower than that at the beginning of the period, which is at a lower level in the industry; the cash on hand at the end of the period is 1 billion yuan, which is lower than the sum of short-term loans and non-current liabilities due within one year. There is a certain degree of financial pressure in the short term.
Trend of development
Pay attention to both rent and sale in 2017: the company developed both rent and sale in 2017. up to now, the company has 2.09 million square meters of factories, office buildings, residential buildings, shops and supporting properties in the Jinqiao area of Shanghai, as well as 360000 square meters of leased land. In addition, the company continues to strengthen the construction and operation of investment properties. In the second half of this year, the company will launch Biyun 102. At the same time, the construction of Biyun Zun residence and OfficeParkII is also advancing in an orderly manner, which is expected to be launched next year. Property sales and settlement will significantly increase the company's performance in the past two years.
Profit forecast
We keep our full-year earnings per share forecast for 2017 / 2018 unchanged.
Valuation and suggestion
At present, the company's share price corresponds to the 17 / 18 price-to-earnings ratio of 24.6 times / 20.8 times, and we maintain a neutral rating and a target price of 19.00 yuan, which is 6.56% upside from the current share price. Maintain the B-share recommended rating and the target price of $2.2, which is 54% higher than the current share price.
Risk.
Macroeconomic downside risks.
