Summary of the report:
Event: the Ministry of Finance and other four ministries and commissions issued a notice that from January 1, 2019 to December 31, 2021, incubation service income from science and technology business incubators and mass creation space will be exempted from value-added tax and a series of tax concessions.
Main point of view: the company has focused on science and technology industry services for many years, accumulated rich experience and customer resources, formed a strong brand effect, shareholders are rich in resources in the technology industry, helping the company's long-term development. While focusing on the development, operation and service of the science and technology industrial park, the company is actively making efforts in the layout of the two modes of light and heavy assets. Actively promote the "integration of production and city" and the business of science, technology and education.
The introduction of the tax exemption policy (combined with the pilot Kechuang board) is expected to boost the company's science and technology park business, reduce costs and promote the expansion of the company's national layout. In addition, the government's support policies for science and technology enterprises are expected to continue to be launched, and the demand for science and technology enterprises to invest in science and technology industrial parks will become more exuberant.
Compared with the real estate sector, the company's main products are science and technology industrial parks, which are less affected by the regulation and control policies of the real estate market. In addition, the level of gross profit margin and net profit margin of the company is higher, and the impact resistance is higher than the industry average.
Company profit forecast and investment rating. We estimate that the company's operating income from 2018 to 2020 will be 3.75 billion yuan, 6.08 billion yuan and 9.18 billion yuan, respectively, and the corresponding EPS will be 0.79,0.91 and 1.53 yuan respectively, and the corresponding PE will be 6.1,5.2,3.1 times respectively. Maintain the recommended rating.
Risk tips: nationalization expansion is not as expected, operating cash flow tends to be tight, sales and rebates are not as expected.