Core viewpoints
Market volatility weakens, e-commerce business to meet a stable market environment, is expected to recover. The company's main business is online marketing, accounting for 92% of its revenue. The strengthening regulation and ups and downs of the real estate market in 2016 have led to a relatively obvious decline in the new housing agency and marketing industry, and the market volatility has weakened since 2017, which is conducive to the development of the new housing agency and marketing industry. The company's main layout of the Yangtze River Delta region, the property market bottomed out and hit the bottom to pick up the phenomenon, at the same time developers to pay back as the most important assessment indicators, the dependence on marketing tools will be increased.
Newly obtained the Internet financial small loan license, the financial business income model upgrade growth is expected. The company's original Internet platform only charges a small amount of information channel fees by listing partners' financial products. The company obtained an Internet finance small loan license in December 2015, and then set up a small loan company in June 2016. Since then, it can make loans directly to lenders through small loan companies, which will earn higher profits. The company's loan book balance reached 400 million yuan at the end of 2016. according to the company's semi-annual report data, the loan balance increased to 640 million yuan in the first half of 2017, and the small loan business grew rapidly.
In response to the national call to develop the rental market, we will layout the rental platform in advance. Nanjing Municipal Government issued a new lease policy and proposed the construction of a housing rental service supervision platform. As a leading local Internet real estate company, the company has ploughed the Nanjing market for many years and is expected to take the lead in the construction of leasing information platform. The company's rental platform "Ai Rent" was officially launched in April 2017. it is positioned as a third-party service organization, serving apartment companies, professional landlords and young tenants, providing access for apartment owners and professional landlords. At the same time, provide tenants with monthly payment products to help apartment parties and professional landlords withdraw funds to improve operational efficiency. In addition, in the future, small and medium-sized long-term rental apartment companies also have access to which platform to rent, and the development of the platform is expected.
Financial forecasts and investment suggestions
For the first time, the buy rating is given, with a target price of 25.46 yuan. We predict that the EPS of the company from 2017 to 2019 will be 0.67, 0.77, 0.92 yuan, and the company's performance will enter a period of continuous growth with the expansion of financial business. According to the comparable company's 2017 PE valuation of 38X, the company was given a "buy" rating for the first time, with a target price of 25.46 yuan.
Risk hint
The real estate regulation and control policy caused the growth of online marketing business to fall short of expectations. The growth of Internet financial business is less than expected. The development of rental market and information platform is not as expected.