Soil storage: accurate layout and guaranteed sales growth
From January to May, the total sales area of commercial housing nationwide was-1.6% compared with the same period last year. The western region bucked the trend, accumulating + 3.8% from January to May compared with the same period last year. In May, the country is-5.5% compared with the same period last year, and the western region is + 3.8% year-on-year. The western region accounts for 59% of the land reserves to be developed, and the western region accounts for 50% of the uncompleted area (total construction area). The company is expected to benefit from the market regional heat differentiation, sales growth is guaranteed.
Sales: increase the opening project, the proportion of the western region needs to be improved.
In 2019, Q1 company has increased the opening of the project de-marketing, the main contribution areas are Chongqing and Wuhan. From the perspective of regional structure, the central region has increased its 5.16pc to 35.48% compared with 2018. With the further appearance of the advantage of sales growth in the western region, the proportion of sales in the western region of the company is expected to increase. Q1 received 27.313 billion yuan in advance in 2019, an increase of 149% over the same period last year, covering 2.25 times revenue in 2018.
Take the land: make more efforts to cover the positions and focus on the core cities.
Since 2019, the company has added 161 million square meters of capacity, and in 2019 Q1 has acquired 99% of the land area / contracted area, which is significantly higher than that in 2018. The joint acquisition of land has increased, which respectively involves cooperation with Sunac, Ping an and so on. In terms of amount, the ratio of land ownership to equity in the first half of the year is 61.6%, which is higher than that of 2018-30.8pc. Regionally, first-and second-tier cities such as Chongqing, Shanghai and Xi'an account for more than 60%.
Gross profit margin in the first quarter was + 5.17pc year on year, and net debt ratio rose slightly.
In 2019, Q1 achieved revenue of 1.28 billion year-on-year + 0.78%, deducting non-return net profit of 136 million year-on-year + 80.15%. Q1 in 2019, the company's gross profit margin is 38.4%, compared with Q1 + 5.17pc in 2018, and net profit rate is 9.11%, which is higher than Q1+1.15pc in 2018.
In 2019, the financing structure of Q1 company remained stable, and the proportion of short-term borrowing increased slightly. Due to the increased intensity of foreign land acquisition, the net debt ratio was 41.87 per cent higher than at the end of 2018 14.78pc. It is proposed to set up a special trust beneficial right asset support plan and a supply chain financial asset support special plan, with a financing scale of 1.2 billion and 3.5 billion respectively, and there is still much room for leverage improvement in the future.
Profit forecast
The company is expected to benefit from the market regional heat differentiation, sales growth is guaranteed; advance payment growth remains high, follow-up settlement is guaranteed; debt ratio is still low, is actively expanding financing channels, the scale is expected to further expand. We slightly raised the company's forecast EPS for 2019-2021 to 0.60,0.84,1.01 yuan (originally 0.59,0.82,0.99 yuan). The current stock price corresponds to the forecast PE of 6.6,4.7,3.9 times for 2019-2021. Maintain 10 times PE in 2019, corresponding to the target price of 6.01 yuan, and maintain the "buy" rating.
Risk hint: the push plate is less than expected, and the military industry and greening business are not as likely as expected.