Main points of investment:
Event: the company announced the revision of the new restricted stock incentive plan.
The amendment increases the number of equity incentive shares and increases the grant price. According to the company's September 21 announcement, the company revised the new equity incentive draft proposed in the August announcement, raising the original plan to grant 24.1 million restricted shares to 27.7 million shares, accounting for 2.92% of the total share capital. Among them, 22.2 million shares were granted for the first time, accounting for 80.14% of the shares to be granted this time, accounting for 2.34% of the total share capital; and 5.5 million reserved equity shares, accounting for 19.86% of the shares to be granted, accounting for 0.58% of the total share capital. The price granted for the first time has been raised from 6.24 yuan per share to 6.37 yuan per share. The object of equity incentive has been raised from 56 to 58, and the proportion of equity granted by individual management has changed slightly.
Lift the sales restrictions and be optimistic about future profits. According to the amendment, the requirement to lift the sales restriction is in line with the company's sales revenue target and the original plan, and the net profit target is raised. The sales revenue conditions for lifting the restriction on the sale of shares granted for the first time are still not less than 110,150 and 20 billion yuan respectively for real estate contracts signed in 17,18,19 years. The main change is the net profit unlocking target: based on the net profit belonging to the parent company in 2016, the 18-year net profit growth rate was raised from 100% to 130%. In 19 years, the net profit growth rate was raised from 200% to 230%. The 18-and 19-year performance requirements for reserved shares are consistent with those for the first grant of shares. The company's goal of increasing net profit shows that the company puts forward higher requirements on itself in order to enhance operational efficiency and encourage employees to create greater value for shareholders.
Low-cost expansion of land reserves, performance breakthrough savings strength. Fuxing acquired the low-value land in Jianyang area of eastern Chengdu through acquisition in August 17, covering an area of 4929 mu. The agreed land price between the two parties will be between 3000 yuan per square meter and 4500 yuan per square meter, and the land cost is relatively low. The site is located between the center of Chengdu and the second largest airport in the country, and has the potential for appreciation. In the project, 308 mu of land in 800mu of development land has been granted the right of use, and the company announced that it will earn an estimated income of 10-1.3 billion yuan. In addition, the project also has 4125 mu of collective land, and the company announced that it is considering to try the leasing business. After Chengdu became the pilot city of long rent selected by nine ministries and ministries, and the Ministry of Land issued a document to encourage the rational use of village collective land as long-rent apartments, the potential of Jianyang project is considerable.
Maintain a "buy" rating. According to the amendment, we slightly increase the company's 18-19 performance. We expect EPS for 17 and 18 years to be 1.15 and 1.39 yuan per share. On September 21, the company's closing price was 12.62 yuan, corresponding to a 17-year PE multiple of about 11 times. Taking into account the company's policy dividends and equity incentives to establish a long-term mechanism, we give the company 17 years 18 times valuation, corresponding to the target price of 20.65 yuan, maintain the "buy" rating.
Risk hint: policy continues to tighten, volume and price go down.
