Core viewpoints
In the past 17 years, the branded clothing business has benefited from the continuous pick-up of middle and high-end consumption. Benefiting from the recovery of domestic middle and high-end consumption, the company's brand clothing business revenue and profit growth began to stabilize and improve in 17 years, and clothing sales growth is expected to be in double digits in the first half of the year. considering a series of changes in the organizational structure, channels, membership system and other aspects of the company's clothing business since the beginning of 16 years, we expect the improvement of the company's brand clothing business to run through the whole year.
The real estate business increases the land reserve to provide protection for sustainable development. Youngor's real estate business may face some pressure this year due to cyclical factors of project development. however, the continuous increase of land reserves since 16 years (3 new land reserves in 16 years, and the establishment of Shanghai Real Estate Development Company in 17 years to find high-quality projects and new directions) has strengthened the stamina for the follow-up development of the company's real estate business. On the other hand, combining the idea of "industrial investment transformation" with Youngor's own resource advantages, it is expected that in the future, the company's real estate business will probably focus more on the cross-market segments of modern service industries and real estate development, such as health industry, health care and pension, tourism and vacation, culture and entertainment, and so on.
The potential revaluation of equity in the investment business is huge. According to the first quarterly report, the company holds 11.64% of Ningbo Bank and 0.74% of Pudong Development Bank, corresponding to a current market capitalization of 12.3 billion. If the company's 0.38% stake in CITIC Limited is taken into account, the total market capitalization has reached 27.1 billion yuan. The recent rise in banking stocks and the recovery of the Hong Kong market have brought more room for potential market capitalization revaluation for the company's investment sector.
The increase of controlling shareholders, financial and industrial capital reflects the recognition of the value of the company from the side. From March to April in 16 years, the controlling shareholders increased their holdings by a total of 40.48 million shares, taking into account the average cash dividend price of 9.66 yuan per share. Yao Jianhua and Zhu Chongyi and their partners raised their cards in March 16. All these reflect the confidence of major shareholders in the company's continued growth and strength in the future and industrial capital's recognition of the value of the company. In retrospect, the company's stock price tends to perform well when the financial and real estate stocks outperform the market (2007 and 2015). The current low valuation level and annual dividend yield of about 4% are expected to enhance the attractiveness of the company's stock price. The recent continuous rise in bank and real estate stocks and the landing of the company's investment business transformation are expected to become the catalyst for the company's share price to rise further.
Financial forecasts and investment suggestions
Due to the increase in equity after the increase, we expect the company's earnings per share to be 1.12,1.20 and 1.28 yuan respectively from 2017 to 2019. With reference to the comparable average valuations of the men's wear and real estate sectors, we maintain the company's clothing and real estate business 27 times and 10 times PE for 17 years, while the investment business only considers the 12.3 billion yuan of Ningbo Bank and Pudong Development Bank. The total company valuation is 43 billion yuan, corresponding to the target price of 12.01 yuan. Maintain the company's "overweight" rating.
Risk hint
The impact of financial market adjustment on the investment sector, clothing retail and real estate continued to be lower than expected.