Main points of investment
The scale of settlement increased, and the company's performance slightly exceeded expectations. According to the company's announcement, the company's parent profit is expected to increase by 45-540 million yuan in 2017, a year-on-year increase of 75%. The deduction of non-net profit is expected to increase by 6.3-720 million yuan, an increase of 110% over the same period last year. The increase in the company's performance is mainly due to the increase in the scale of settlement. The company's non-recurrent profit and loss mainly comes from the commercial sector, which continues to decline due to the impact of e-commerce. We believe that the company will focus more on real estate development and holding property management in the future.
The sales performance under the regulation of real estate is weak, but the marginal impact is limited. According to data from the CRIC Research Center, the company signed a contract area of 128.1 million square meters in 2017, with a contract amount of 22.6 billion yuan, basically the same as in 2016. The company's projects are in hot cities, regulation has a great impact on the company, and the performance of sales data is weak. Due to the mature market and fierce competition in the city where the company's project is located, the company actively cooperates with well-known brands of real estate enterprises, which ensures the de-industrialization level to a certain extent. As far as policy is concerned, we believe that as the real estate market begins to stabilize and the possibility of further policy upgrading is low, there is a good chance that corporate sales will be able to maintain a steady rise.
The strategic layout is appropriate, and the scale of land acquisition has increased. The company began to expand nationally from 2014 to 2017. from 2014 to 2017, the full-caliber land area was 68.7,85,229.9 and 817,000 square meters respectively, and the amount of land was 29.4,69,132.7 and 11.99 billion yuan respectively. The company has successfully transformed from the traditional urban layout of Beijing + Changsha to the quasi-nationalized layout of Beijing + major second-tier cities. Although the competition pattern of TOP20 in the industry is solidified at present, for enterprises of this size, second-tier cities are the necessary strategic layout to impact TOP50.
The stable operation of holding property is where the core competitiveness of the company lies. The company holds and operates a property area of 1.24 million square meters in the core area of Beijing Asian Olympic Games (including 3264 million square meters of conference center, 365000 square meters of office buildings, 2916 million square meters of hotels, 1797 million square meters of apartments and 802 million square meters of commerce).
In the first three quarters of 2017, the company's total investment property income reached 2.008 billion yuan. High-quality holding property is the core competitiveness of the company, which not only contributes to the company's sustained and stable cash flow and profits, but also helps the company to broaden its financing sources and reduce financing costs.
Risk hint. 1, the time for the company to acquire land on a large scale is relatively late, the land cost has no obvious advantage, and the level of gross profit margin may not be very high in the future; 2, the company's urban real estate policy is relatively strict, and there is a risk that the number of pre-sale certificates and sales prices will be lower than expected in the future; 3. With the increase of corporate cooperation projects, there is a risk that minority shareholders' rights and interests will have a greater impact on the income statement.
Profit forecast and valuation. The company has taken more active land in recent years, and its strategic layout is focused on second-tier cities. Since 2016, its sales volume has been significantly increased, and the sales scale has maintained a high level. The company holds high-quality property in Beijing area, and its performance is relatively stable. Taking into account the company's performance guidelines, we adjust the company's annual profit forecast for 2017-18-19 to 0.33cm 0.40max 0.47 yuan per share (the original forecast is 0.28max 0.35max 0.41 yuan per share), and give 2018 12 times the target price of PE, that is, 4.80yuan per share, maintaining the "overweight" investment rating.