The net profit of returning home in the first three quarters was 300 million yuan, down 38% from the same period last year.
Huayuan Real Estate announced 1-3Q18 results, operating income of 3.1 billion yuan, down 45% from the same period last year; net profit of 300 million yuan, down 38% from the same period last year, corresponding to 0.12 yuan per share.
The decrease in settlement items led to a sharp drop in income. During the period, the company's operating income fell 45% from the same period last year, mainly because the number of items eligible for settlement decreased compared with the same period last year; the gross margin for settlement increased by 7 percentage points to 26% over the same period last year, and the net profit margin increased by 1 percentage point to 10% over the same period last year.
The net debt ratio is high, focusing on short-term debt service risk. The company's net debt ratio at the end of the period dropped 15 percentage points to 179% compared with the middle of the year, which is still at a high level in the industry. During the period, due to the company's massive acquisition of land, the cash outflow from operating activities was 5.1 billion yuan, and the cash on hand at the end of the period was only 3 billion yuan, which was less than the interest-bearing liabilities due within one year.
Trend of development
The annual sales are expected to reach 12 billion yuan. During the period, the company realized contracted sales / sales area of 9.1 billion yuan / 680000 square meters, an increase of 60% and 30% respectively over the same period last year. We expect the company's annual sales to reach 12 billion yuan, corresponding to a year-on-year growth rate of 55%.
The expansion of soil storage has been accelerated, and the construction area has greatly increased. During the period, the company added 2.02 million square meters of land storage construction area, up to three times the sales area of the current period, and entered cities such as Chongqing and Yinchuan; the area of new construction increased by 301% to 1.69 million square meters over the same period last year, and the area for resumption of construction increased by 63% to 2.62 million square meters over the same period last year, providing an adequate supply of goods for sales next year.
Investment property development accelerated. During the period, the company's rental income was 170 million yuan, an increase of 289% over the same period last year, and the rental rate increased by 19 percentage points over the same period last year to 96.3%. Rentable area and leased area recorded an increase of 74% and 116% respectively over the same period last year.
Profit forecast
Considering that the settlement progress was lower than expected, we lowered our 2018 Universe 19e earnings per share forecast by 8.9% Universe 9.6% to 0.33 Universe 0.38 yuan.
Valuation and suggestion
The company's current share price corresponds to 6.8gamma 2018x19e, maintains a neutral rating, and downgrades the target price by 9% to 2.49 yuan (mainly because the settlement progress is lower than expected). The new target price corresponds to 7.5gamble 6.6 times 2018Universe 19e target P / E and 10% upside.
Risk
The progress of settlement was not as expected, and the urban regulation and control policy of the core layout was upgraded.
