I. Overview of events
Bright Real Estate released its three quarterly results for 2018: the company's operating income in the first three quarters was 9.401 billion yuan, down 13.55% from the same period last year, and its net profit was 1.012 billion yuan, an increase of 68.72% over the same period last year.
II. Analysis and judgment
Continued improvement in profitability and steady growth in sales
The company's operating income in the first three quarters decreased by 13.55% compared with the same period last year, and its net profit increased by 68.72% compared with the same period last year. The main reason why the profit growth rate is higher than the revenue growth rate is that the improvement of the settlement and operation management efficiency of the company's high gross margin projects has led to a substantial increase in the company's gross profit margin and net profit margin. In the first three quarters, the contracted area of the company was 1.3742 million square meters, down 10.42% from the same period last year; the signed amount was 17.364 billion yuan, an increase of 11.87% over the same period last year, and the sales amount increased steadily. At the end of the period, the company received 15.095 billion yuan in advance, covering 161% of the operating income in the same period, and the annual performance was guaranteed.
Active expansion of land and substantial increase in new construction
The company actively expands the land reserve through diversified channels to ensure that the saleable value can be quickly replenished in the short term. From January to September, the new real estate reserve area of Guangming Real Estate reached 8033 million square meters, an increase of 168.66% over the same period last year. In the third quarter, in September alone, it successfully won six plots and added a total of about 433 mu of land reserve rights. At present, the industrial territory of Guangming Real Estate has been upgraded to 10 provinces and two cities across the country, which will accumulate sufficient land resources for the strategic goal of Shanghai accounting for 50%, Jiangsu-Zhejiang Yangtze River Delta accounting for 25%, and other key cities accounting for 25% in the future. At the same time, the company's new construction area in the first three quarters was 2.6054 million square meters, compared with 1.1804 million square meters in the same period last year, an increase of 120.72% over the same period last year, providing a solid guarantee for future performance growth.
Relying on Guangming Group for positive and diversified development
On the basis of strengthening the main business and with the support of Guangming Group, Guangming Real Estate is striving to become a diversified development and operation platform, as well as a comprehensive group integrating real estate, investment, industry and finance. The company will build five key platforms, namely, "commercial plate, logistics plate, supply chain plate, service plate and construction plate". These five platform plates will become new growth points for the company's future development.
III. Investment suggestions
Bright real estate 2018 profitability continues to improve in the first three quarters, steady growth in sales, at the same time, cold chain logistics and other diversified businesses have greater room for development. The company is actively expanding, with Shanghai as the core to expand to the surrounding hot cities. It is estimated that the company's EPS in 18-20 years will be 1.47,1.77,1.96 yuan, corresponding to 2.4pm / 2.0max / PE 1.8x, and the company's highest, lowest and median PE in the past three years will be 71.3 / 2.8pm / PE 12.2 times respectively, maintaining the company's "recommended" rating.
Fourth, risk hint: the regulation and control of real estate continues to be tightened, and the diversified development is not as expected.