I. Overview of events
Xinhua United disclosed that during the reporting period, the company achieved operating income of 3.202 billion yuan, an increase of 115.70% over the same period last year, and a net profit belonging to the parent company of 175 million yuan, an increase of 217.61% over the same period last year. The weighted return on net assets reached 4.66%, an increase of 0.77 percentage points over the same period last year.
II. Analysis and judgment
Operating income and asset scale have increased steadily, and operating efficiency has improved.
The substantial increase in operating income was due to the increase in revenue caused by the project carry-over income and the acquisition of Hunan overseas during the reporting period. By the end of the reporting period, the total assets of New Hualian were 54.618 billion yuan, an increase of 6.14% over the end of last year, and the net assets belonging to shareholders of listed companies were 6.642 billion yuan, an increase of 1.51% over the end of last year.
While the operating income has increased steadily, the operating efficiency of the company has also improved. During the reporting period, the gross profit margin of New Hualian was 32.36%, an increase of 3.8 percentage points over the same period last year. The cost rate for the period decreased from 26.02% in the same period last year to 22.06% in the reporting period. While expanding the business, the company has strengthened the cost control, and the company's operating efficiency has been continuously improved.
Promote diversified business, cultural and tourism projects continue to land.
On August 28 this year, the Xinhua United Tongguanyao International Cultural Tourism Resort project in Changsha was officially opened. the company had expected that the project would achieve a cumulative sales income of 20.789 billion yuan and a net profit of 6.978 billion yuan during the predicted operation period. the net interest rate of the project capital investment is 11.20%, which has good economic benefits. The company's cultural and tourism projects actively expand to education, sports, culture, exhibition and other industries, in order to realize the multi-linkage of the company's commercial real estate and cultural real estate plate to continue to explore new ways.
Marching into financial science and technology to realize strategic transformation
New Silk Road Culture Travel (0472.HK), a subsidiary of Xinhua Union, completed the transaction of 100% economic interest in Shenzhen you and I Financial Information Services Co., Ltd. by issuing shares to purchase the 100% economic interests held by derivative Technology Group Co., Ltd., and you and I Finance became a wholly-owned subsidiary of New Silk Road Wen Tour and included in the consolidated statement scope of New Silk Road Wen Tour. Xinhuanlian will speed up the transformation of the company's business strategy.
III. Investment suggestions
The steady development of Xinhua United Real Estate business, while comprehensively promoting the strategic transformation of "literature and tourism + real estate + finance", the coordinated development of the company's diversified business can be expected in the future. The company's maximum, minimum and median PE in the past three years are 46.3,8.1 and 27.2, respectively. The current PE of the real estate sector as a whole is 10.5. It is predicted that the EPS of New Hualian from 2018 to 2020 is 0.59,0.73,0.87 yuan respectively, and the corresponding PE is 6.7,5.4,4.5 respectively.
Fourth, risk tips:
The regulation and control policy of the real estate industry has been tightened, and the progress of the transformation has been lower than expected.