Events. The company publishes its annual report for 2017. During the reporting period, the company realized revenue of 2.19 billion yuan, an increase of 85.7% over the same period last year; net profit belonging to shareholders of listed companies was 231 million yuan, an increase of 50.8% over the same period last year; and basic earnings per share was 0.12 yuan. The company pays a cash dividend of 0.12 yuan (including tax) to all shareholders for every 10 shares.
In 2017, the company's revenue increased by 85.7%, driven by a good carry-over of real estate sales, and the increase in minority interests in carry-over projects over the same period narrowed the growth of net profit to 50.8%. In 2017, the contracted area of the company's sales projects was 804,000 square meters, an increase of 137.17% over the same period last year, and the contracted sales amount was 1.95 billion yuan, an increase of 112.65% over the same period last year. By the end of 2017, the company's total rental area was 2692 million square meters, an increase of 21.92 percent over the same period last year, and rental income reached 221 million yuan, an increase of 5.24 percent over the same period last year. By the end of 2017, there were 222 incubation nursery projects in Juneng Bay, with 255 incubation enterprises and 47 accelerator enterprises. At present, there are 5 industry carrier projects under construction led by the company, involving a total construction area of 480000 square meters. The company invests in Shanghai data Exchange Center Co., Ltd., accounting for 4% of the equity. At present, Shibei High-tech Park gathers 18 regional headquarters of multinational corporations and more than 50 enterprises with headquarters characteristics, and more than 150 enterprises of cloud computing and big data. At present, the Ju Neng Bay Incubator is working hard to build a 100,000 square "City North Ju Neng Wan Innovation Community". It has introduced a total of 200 start-up small and micro enterprises, of which 81% are big data cloud computing enterprises.
In March 2017, the company successfully won Unit 01-06 of Unit N070501 of Shibei High-tech Service Park, Jing'an District, Shanghai. On March 18, 2017, the company announced that the company had participated in subscribing for East China Construction Group Co., Ltd. (hereinafter referred to as "China Construction Group", stock code: 600629) issued shares to purchase assets and raise matching funds of 1.38 million non-public offering shares, accounting for 0.32% of the total number of shares issued by China Construction Group. In December 2017, the company subscribed for 3.83 million shares in Shanghai Chuangchuang International Marine Resources Co., Ltd. In December 2017, the company plans to sell 12200 ping real estate project in Jing'an District, Shanghai for 463 million yuan.
Investment advice. Benefiting from the construction of data trading centers and scientific and technological innovation centers, equity investment is expected to grow rapidly. The company is located in the "boutique park" integrated operators, service integrators and investors, and has laid out 3.13 square kilometers of Shanghai Zhabei North High-tech Industrial Park and 5.2 square kilometers Nantong Science and Technology City Industrial Park. The company holds a total of 1.18 million square meters of rights and interests in Shibei High-tech Park. At the same time, in the next five years, the north high-tech park can develop 2.6 million square meters, and Nantong has a reserve of 4200 mu of land. In recent years, the company has increased its investment in venture capital business, and its future development is promising. We estimate that the company's EPS will be 0.17 yuan and 0.22 yuan in 2018 and 2019, and the corresponding RNAV will be 9.56 yuan. Considering that the company is within the scope of the Great Zhangjiang River, and is expected to enjoy favorable policies such as the construction of Shanghai Science and Technology Innovation Center and data Trading Center (with market uniqueness) in the future, and taking into account the large fluctuations in the company's residential sales, the sales of industrial carriers in the park have decreased, while the leased property and rental income have increased year by year, we take the 20% discount of RNAV, which is more suitable to measure the valuation of leased properties, as the company's target price for the next 6 months, corresponding to 7.65 yuan. Give a "buy" rating.
Risk tip: the company faces the risk of economic fluctuations and a decline in rental and sales.