Summary:
At present, the company has formed two core industries, the metal products industry and the real estate industry, and the real estate industry has become the main source of sales and profits. Its holding subsidiary, Fuxing Fitch, is a leading real estate development enterprise in the central region. since 2005, the company has been ranked as one of the top 100 real estate enterprises in China. At present, the company's projects are mainly distributed in Wuhan and its surrounding areas, and are deeply involved in old reform projects, including sister-in-law Shu Village, Hejiadun, and Hongqiao Village, etc.
The company established the national development strategy of "the core regional market with Wuhan as the center and the auxiliary regional market with Beijing as the center". It first entered the capital in 2013 and successfully won the Yudaihe Street project in Tongzhou District, Beijing. In addition, in September 2017, the company signed a "Cooperation Framework Agreement" with Jianyang Phoenix Valley Investment Co., Ltd. to acquire Phoenix Valley Real Estate and add another city to the national layout. As of the first half of 2017, the company has a land reserve of about 2.2 million square meters and more than 30 projects under construction. The existing reserve resources can support the company's development needs in the next 3-5 years.
Profit forecast: affected by real estate restrictions in 2017, the company's operating income decreased by 5.44% in the first half of the year compared with the same period last year, and net profit increased by 35.96% compared with the same period last year. As of the first half of 2017, the company still has 445700 square meters of stock that has not yet been settled, and the amount of accounts received in advance is 7.527 billion yuan. Combined with the restricted stock equity incentive plan disclosed by the company, the company's 2017 performance still has potential. It is estimated that the company's EPS will be 0.86,0.95 and 1.25 yuan respectively from 2017 to 2019, with a "overweight" rating.
Risk tips: 1) the risk that real estate sales fall short of expectations; 2) the risk of real estate policy changes.