Major asset restructuring completed in 2018, net profit deducted from non-return increased by 7.6 times
According to the 2018 company's annual report, the total share capital at the end of the period was 5.08 billion shares, with total assets of about 56.6 billion yuan, net assets of about 13.7 billion yuan, revenue of 19.286 billion yuan, adjusted year-on-year profit of 2.592 billion yuan, year-on-year adjusted net profit of 2.592 billion yuan, and non-return net profit of 2.471 billion yuan compared with the same period last year (Shanghai region accounted for 66.7%). The signed area is 399800 square meters, and the average signing price is about 34600 yuan per square meter.
The resources are concentrated in Jiangsu, Zhejiang and Shanghai, the cash is abundant, the finance is stable, and the operation efficiency is improved obviously.
In terms of resources, by the end of 2018, the company has a total capacity of 420,000 square meters of land to be developed and holds 4600 mu of agricultural land in Chongming Island. The total construction area of projects under construction is about 1.64 million square meters (61% of Shanghai and 32% of Jiangsu). The holding stock of properties are located in Shanghai, with a rental income of 650 million yuan in 2018.
In terms of liabilities, the company's asset-liability ratio at the end of 2018 is 72.4%, deducting the pre-received asset-liability ratio of 52.7%; monetary funds are 17.6 billion, net debt ratio is-14%, cash / short-term debt is about 2.55%; the main rating is AA+, the outlook is stable; and the annualized comprehensive financing cost is 5.3%.
In terms of efficiency, the company's operating efficiency has improved significantly. In 2018, the settlement gross profit margin and return net profit rate were 43% and 16.9% respectively, the weighted ROE and weighted non-ROE were 22.7% and 28.7% respectively, and the number of inventory turnover and total asset turnover were 0.63 and 0.46 respectively.
Raise the 12-month target price to 8 yuan and maintain the "buy" rating
The company has completed a major asset restructuring, has plenty of cash on hand, and its operating efficiency has improved significantly. The stock of assets is concentrated in the core area of Shanghai, benefiting from global asset allocation, declining discount rate and fair value revaluation.
We believe that the highlight of the company in 2019 lies in the continued improvement in management efficiency. With a high revenue base in 2018 and relatively limited settlement resources, the company is expected to have limited revenue growth in 2019. However, thanks to the increase in gross profit margin and the decline in fees during the period, we expect the company to maintain double-digit net profit growth in 2019. The forecast net profit of 2019-2020 is lowered to 2.9 billion and 3.29 billion (originally 3.06 billion and 3.63 billion). The projected net profit of 2021 is 3.85 billion, and the EPS of 2019-2021 is 0.57,0.65 and 0.76 yuan, respectively. The valuation of 14 times PE in 2019 is given, and the 12-month target price is raised to 8 yuan, maintaining the "buy" rating.
Risk hint
After the reorganization of the company, it is possible to improve the efficiency of operation and management less than expected; the decline in macroeconomic growth may lead to a decline in the rental and rental rate of the company's leased property.