Main points of investment
The three major businesses form a closed loop of the whole industry chain and consolidate the position of the industry through coordinated development. Yiju has first-hand housing agency business, big data service business and second-hand housing brokerage platform business, there is a strong collaborative relationship between the three major businesses. First-hand housing agents can provide micro-information for big data services for data analysis, and at the same time better cut into real estate developers to obtain housing sources to empower small and medium-sized brokerage enterprises; big data service can help first-hand housing agency business and second-hand housing brokerage platform business to achieve more accurate marketing; second-hand housing brokerage platform can help big data business to obtain broader and comprehensive market information. The accurate positioning of the three major businesses forms a closed loop of the real estate service industry chain, and the synergy effect is prominent.
The strength of shareholders is strong, the customer relationship is stable, and the scale of consignment is guaranteed. Yi Ju at the beginning of the listing introduced 26 developers as shareholders of the company, Vanke, Evergrande, Country Garden Holdings and other leading housing enterprises are shareholders of the company. With the continuous improvement of the concentration of the real estate market, the company locks the cooperation with the mainstream real estate enterprises in advance, which can effectively enjoy the industry dividend brought by the improvement of market concentration. In the first half of 2018, the first-hand housing agency service revenue generated by the company in cooperation with these 26 developers was 1.211 billion yuan, accounting for 54.3% of the current first-hand agency service income. And at present, the company has signed an unsold reserve project area of 254 million square meters. if it is calculated according to the average sales price of 12497 yuan per square meter and the agency rate of 0.87% in the first half of the year, the company still has 27.6 billion yuan in potential agency service income, which is expected to be gradually released in the next six years.
Kerry big data service can effectively enhance brand awareness and show its synergy. The company's big data business was launched in 2002. at present, the company's CRIC system has recorded more than 86000 residential projects, 20000 commercial projects and 748000 plots of land, covering 367 cities. As of the end of June 2018, big data's business income reached 384 million yuan, accounting for 13.8% of the income. In the long run, customers' requirements for big data's precision will continue to improve in the future, and the company has irreplaceable authority in this business, so we firmly believe that customers will maintain higher enthusiasm in service renewal. We are optimistic about the revenue growth of the business.
Easy-to-live roommates-innovative S2B2C light asset management and control model. Different from the traditional second-hand brokerage platform, Yiju Fangyou does not open its own brokerage store, but adopts the light asset operation mode of S2B2C. Fangyou's adoption of non-franchise and pure platform model can effectively enhance the enthusiasm of second-hand housing brokerage companies. Fangyou platform was established in 2016. By the end of August 2018, the number of Fangyou stores has exceeded 10000, and the number of stores has increased rapidly. In the future, as a large number of stores begin to contribute sales, the growth rate of the company's roommate business income will be very considerable. The income of real estate brokerage network service in the first half of the year was 168 million yuan, exceeding the level for the whole year of 2017.
Investment advice: the coordinated development of the three major businesses of E-House has formed a closed-loop whole-industry chain service, and the strong shareholder background has enhanced the certainty and growth of the company's performance; big data and Fangyou have unique competitive advantages, effectively enhance the authority and popularity of the company. We estimate that the EPS of the company from 2018 to 2020 will be 0.73,0.94,1.15 yuan respectively, corresponding to PE 16.4,12.8,10.5 times, respectively. For the first time, the company will be given "overweight" rating.
Risk tips: industry sales fluctuations; policy adjustment leads to operational risks (shed reform, regulation, tax policy, etc.); changes in financing environment (mortgage, development loan, interest rate adjustment, etc.); exchange rate fluctuation risk; high risk of revenue concentration.