Morgan Stanley

According to a report published by Morgan Stanley, the company's core profit increased 83% year-on-year to 5.66 billion yuan last year, 16% higher than market expectations. Gross margin increased 1.5 percentage points to 34.8%, while net debt improved to 177%. The annual dividend was 0.36 yuan per share, reflecting a rise in the dividend ratio to 38% and the dividend rate of 6.1%.

Daimo said that Xincheng Development (01030) is still the bank's first choice. Considering its strong profit visibility and flexible investment property performance, earnings forecasts for this year and next two years were raised by 4.4% and 4.5% to reach 7.226 billion yuan and 9.315 billion yuan respectively, and the core profit is expected to reach 10.102 billion yuan in 2021. The target price was raised from 10.12 yuan to 10.58 yuan, and the rating maintained an “increase in holdings”.

The company's sales target for this year is 270 billion yuan, an increase of 22% over last year's actual sales. The bank believes that the target is conservative and achievable. Considering that its sellable value reached 500 billion yuan this year, the target removal rate was only 55%, while last year's removal rate reached 70%. By the end of last year, the company's unrecorded sales reached 276.9 billion yuan, and its gross margin remained stable, making its profit growth trend more clearly visible.

In terms of property investment, by the end of last year, the company had opened 42 “Wuyue Plaza”. Rental revenue increased 108% year-on-year to 2.1 billion yuan. The main benefit was a high occupancy rate of 98.84%, and same-store sales in more mature shopping malls increased 25%. The company plans to open 22 “Wuyue Plaza” in 2019, with a rental revenue target of 4 billion yuan or an increase of 89% year-on-year, and a rental revenue target of 10 billion yuan by 2021.