Main points of investment:
Event: the company announced that the shareholders' meeting approved the equity incentive plan.
The shareholders' meeting decided to approve the equity incentive plan. The company announced the latest revision of the equity incentive scheme on September 21: the company intends to grant 27.7 million shares (2.93% of the total share capital) to 58 management personnel and core backbone of the company. The equity incentive program is divided into two parts: 1) the number of equity incentive shares granted for the first time is 22.2 million shares, accounting for 80.14% of the shares granted, accounting for 2.34% of the total share capital, and the award price is 6.37 yuan per share; 2) 5.5 million reserved shares.
It is high to lift the restriction on sales. According to the approved equity incentive plan, the requirement to lift the restriction is that the contracted sales of real estate in 17,18 and 19 are not less than 110,150 and 20 billion yuan respectively: based on the net profit belonging to the parent company in 2016, the growth rate of net profit in 18 years was 130%. The growth rate of net profit in 19 years was 230%. The 18-and 19-year performance requirements for reserved shares are consistent with those for the first grant of shares.
In September, the company asked for a restriction on the sale of equity incentives, which shows that the company has high standards and strict requirements on its own, and promotes the motivation of its core employees, which is conducive to the company's performance breakthrough in the next three years.
Key cities reserve land at low prices, and their achievements rise abruptly based on accumulated strength. Fuxing Co., Ltd. has a plot of 26000 square meters in the core area of Tongzhou in Beijing (within the Wanda business circle), with a construction area of about 65700 square meters.
The site is close to the Batong line and has direct access to ITC. According to the company's investor exchange report on September 1, the project can be pre-sold in mid-2018 and is expected to achieve sales of nearly 3 billion yuan. Tongzhou is the future deputy center of Beijing in the master plan of Beijing, carrying the overflowing population and important areas of Beijing. With the development of Beijing-Tianjin-Hebei region, Tongzhou will improve in living environment, transportation and commerce in the next five years (2016-2020). The company holds real estate development projects in the core of Tongzhou. In addition, in August of 17 years, the company acquired the low-value land in Jianyang area of eastern Chengdu at a low price by way of acquisition, covering an area of 4929 mu. The plot is also an important intermediate node between the center of Chengdu and the new city in the east of Jianyang. 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. We expect the company's EPS for 17 and 18 years to be 1.15 and 1.39 yuan per share. The closing price of the company on October 16 was 12.20 yuan, corresponding to about 10.6 times the 17-year PE. 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 PE valuation, corresponding to the target price of 20.65 yuan, maintaining the "buy" rating.
Risk hint: policy continues to tighten, volume and price go down.
