Operating income + 1.2% year-on-year, homing net profit-40.3% year-on-year
1Q18, the company's revenue rose 1.2% year-on-year to 20.12 billion yuan, net profit fell 40.3% to 17.76 million yuan, net profit after deducting non-return fell 43.7% year-on-year, gross profit fell 30.9%, gross profit fell 0.8% to 1.6%, and expense rate rose 0.1% to 3.2%. The decline in performance in the quarter compared with the same period last year was in line with expectations, mainly due to the fact that the company's China Reserve Zhiyun car-free carrier project was in the development period, the investment was not profitable, and the previous profit forecast, target price and "overweight" rating were maintained.
The mode of land storage is expected to continue.
The compensation model for the company's land storage is expected to continue. From 2016 to 2017, the company received government demolition compensation income of 1.04 billion yuan and 310 million yuan respectively, accounting for 97.56% and 17.20% of the company's total profits, respectively. With the acceleration of urbanization in China, the company will still have a number of warehouses due to urban planning adjustment, facing demolition. The timing, scale and profit of land exchange are difficult to predict, but we believe that it is more likely to continue and will continue to be the main source of profits for the company in the future.
The growth rate of the trade business may slow down due to the fluctuation of the prosperity of the big goods.
The company's trade products are mainly steel, coal, iron ore and other major products. In 2017, relying on the advantage of warehousing and logistics, the company made the revenue of the trade sector grow by 51.7% compared with the same period last year. The risk of this business agency model is low, but the profit space is also low. In 2018, the price of Dazong goods showed a weak trend on the high base in 2018. if the price continues to decline, the company's trading business income will be reduced, the profit margin will narrow, and the company's performance growth will be hampered.
Car-free transport platform continues to advance
Since 2017, the company has focused on the development of Zhongshu Zhiyun platform to realize logistics and distribution in the way of car-free carrier. The platform makes full use of a large number of trade and transport data accumulated by the China Reserve for a long time, realizes the functions of car and cargo matching, ship and cargo matching, collective bidding and other functions by integrating social transport resources, and provides value-added services such as monitoring and invoicing on the basis of matchmaking deals. it is expected to solve the problem of low loading rate of return vehicles and ships in our country. The project added 1505 customers in 2017, with active carriers accounting for 73.2%. The number of completed transactions and the total tonnage of transactions are among the leading levels in China. At the end of 2016, China's "921" new policy limited the supply of highway capacity, resulting in a rise in highway freight rates, while the China Reserve Zhiyun platform is still in the promotion period, resulting in losses, but we believe that the business has more room for profit improvement in the future.
No car carrier faucet, maintain the "increase" rating
The company has a certain first-mover advantage in the field of car-free carrier. In the future, if we can make full use of the existing transport capacity and cargo resources to enhance customer stickiness and standardization at both ends, the China Reserve Zhiyun platform is expected to develop into another source of power for the company's growth. However, we believe that the project does not make a profit contribution in the short term, maintaining the previous earnings forecast, target price and "overweight" rating.
Risk hint: falling commodity prices reduce income, reduce profit margins, and increase the risk of bad debts. Vicious competition broke out in the car-free carrier industry.
