Main points of investment:
Event: the company announced to participate in the land development announcement of Wuhan Yangtze River New City.
Participate in the construction of Wuhan Yangtze River New City and actively communicate to obtain the old reform project. In January 17, the 13th Party Congress of Wuhan City put forward the goal of "comprehensively opening a new journey for the rejuvenation of Greater Wuhan", and proposed to speed up the construction of a modern, internationalized and ecological greater Wuhan. Among them, the Yangtze River New Town is the key development area of Wuhan Municipal Government in the future.
Wuhan Yangtze River New Town covers Wuhu Lake and Chenjiaji area. The whole project is planned to be carried out in three phases. The first phase starts from the Chenjiaji Wuhu block, covering an area of about 30-50 square kilometers. According to the announcement of Fuxing Co., Ltd., the construction of the Yangtze River New Town will involve a number of reconstruction projects of "villages in the city" in the region. The company is in close contact with relevant government agencies and actively participate in the transformation and construction of the new area. Recently, Fuxing Fitch, a wholly owned subsidiary of the company, signed a "Strategic Cooperation Framework Agreement" with the Nanhu Village Village Committee of Dengkou Street, Huangpi District, Wuhan, and successfully obtained the Nanhu Village Reconstruction Project of Dengkou Street, Huangpi District (referred to as "Nanhu Village").
Nanhu Village is located in the first phase of the new district start-up area, the location is superior. The old renovation project of Nanhu Village is located at the junction of Jiangan District and Huangpi District of Wuhan City, which belongs to the core area and the first phase start-up area of the Yangtze River New Town. It is located at the junction of the third Ring Road Expressway and Light Rail Line 1, to the east of Dengkou New City, Light Rail Station. The comprehensive transportation system of this area is perfect and the geographical position is superior. According to the company announcement, the design land area of the old reform project in Nanhu Village is about 3000 mu (2 million square meters). The nature of the land is development, construction and industrial land.
Expand the whole country based on Wuhan and actively expand the land reserve. Up to now, 17H1 has obtained 26 projects, of which 24 are located in Wuhan and its surrounding cities. The land reserve of 17H1 is 6.5563 million square meters, and the reserve area located in and around Wuhan is 6.4217 million square meters (98%). In addition, 17H1 until the time of this report, the company has acquired industrial plots in Shenzhen Futian Free Trade Zone, Chengdu Jianyang 210,000 square high-quality residential project (and more than 4000 mu of collective land transformation framework agreement), Sichuan Dujiangyan more than 220,000 square residential project. The focus of the company is in Wuhan, but it has gradually expanded to other cities, laying out Beijing, Shenzhen, Chengdu, Yueyang, Chifeng and other areas. According to the company announcement, the controlled land reserve can meet the development needs of the company in the next five years, and is still actively expanding high-quality land.
Investment advice: maintain a buy rating. In October, the company announced the growth rate of its annual results for 17 years, and its net profit is expected to be about 9-1.1 billion yuan, an increase of 55-100% compared with the same period last year. In the past 17 years, the company has actively expanded the land reserve, and the old reform in the new area and the land in the new area have laid the potential for future development. In addition, the new phase of equity incentive passed in October is conducive to the long-term development of the company. We expect EPS to be 1.15 and 1.37 yuan per share in 17 and 18 years. The suspension price of the company on November 3 is 12.23 yuan, corresponding to about 11 times of the 17-year PE. We value the company 18 times over 17 years and maintain a "buy" rating with a target price of 20.65 yuan.
Risk hint: policy continues to tighten, volume and price go down.