In 2018, the company achieved an operating income of 20.49 billion yuan and a net profit of 1.42 billion yuan, with an operating income of 3.18 billion yuan and a net profit of 369 million yuan in the first quarter of 2019, respectively, compared with the same period last year.
The high base of investment income and impairment led to a decline in performance, and the start of 19 years of sales was slightly weak: the main reason for the decrease in 18 years' net profit was larger than revenue: 1. In 17, the investment income increased greatly due to the transfer of the Dianshan Lake project in Kunshan, which contributed about 940 million yuan. The high base effect makes the investment income reduced by 105% this year. 2. The gross profit margin of settlement is higher than that of last year, and the corresponding increase in local tax increases makes taxes and surcharges increase by 92.6% compared with the same period last year. Sales expense rate, management expense rate and financial expense rate increased by 0.2pct, 0.7pct and 0.72 PCT respectively over the previous year. The provision for inventory price decline in the year 3 and 18 is about 766 million yuan, an increase of 99% over the same period last year. The main reason for the increase in income and no profit in the first quarter of 1919 is that the gross margin of settlement is lower than that of the same period last year. The company signed a contract of 24.46 billion yuan in 2018, an increase of 3.4% over the same period last year, and achieved its annual sales target of 98%. Sales at the beginning of 2019 were slightly weak, with a contract amount of 2.65 billion yuan in the first quarter, down 38.8% from the same period last year.
The reserve is slightly scarce, and the intensity of land acquisition is significantly increased: in 2018, the new real estate reserve area increased by 144.5 square meters, an increase of 55.3 percent over the same period last year, and the land acquisition area accounted for 70 percent of the sales area, which increased 27pct over the previous year, and increased significantly. In the first quarter of 2019, the reserve area increased by 65.33 million square meters, an increase of 35 percent over the same period last year, and the land acquisition area accounted for 293 percent of the sales area. By the end of 18, the land reserve area of the company was about 3.01 million square meters, with the first, second and third and fourth lines accounting for 15%, 30% and 55% respectively. From a regional point of view, Shanghai accounted for 15%, Jiangsu and Zhejiang 49%, and other areas 36%. If we consider the contracted area and new reserve area in the first quarter of 2019, the company's land reserve area is about 3.44 million square meters by the end of the first quarter, which can be developed for 1-2 years, and the reserve is slightly scarce.
The level of debt has rebounded, and the advantage of financing costs has been maintained: in 2018, as replenishment was more active for the whole year, especially in the first half of the year, the net debt ratio and short-term debt pressure increased by 61.4pct and 5pct to 195% and 137% respectively compared with the beginning of the year. The average financing cost for the whole year of 2018 is 5.30%, which is lower than last year's 0.05pct, which is commendable in the context of 18 years of rising financing costs of real estate enterprises.
Profit forecast and investment rating: we expect the company's EPS to be 0.69 yuan in 2019 and 0.78 yuan in 2020, maintaining a "buy" rating.
