Event: the company released its three-quarter report in 2016. during the reporting period, the company achieved operating income of 484.1522 million yuan, an increase of 8.12% over the same period last year. Net profit belonging to shareholders of listed companies was-3.5287 million yuan, down 135.96% from the same period last year.
Gross margin of settlement projects has declined and sales costs have increased significantly.
2016Q3 achieved revenue of 484 million yuan, an increase of 8.12% over the same period last year, which was significantly lower than the growth rate of the previous two quarters; the net profit was-3.5287 million yuan, a sharp drop of 135.96% compared with the same period last year. During the reporting period, there was a small loss in the company's performance, which we believe may be affected by the increase in the settlement area of projects in third-and fourth-tier cities such as Bengbu Amber Xintiandi and Garden during the reporting period, which were mainly pre-sold in 14 and 15 years. Restricted by the limited prosperity of the industry during this period, the gross profit level is relatively low. During the reporting period, the company's sales expenses increased sharply by 72.40% compared with the same period last year, mainly due to the continuous increase in advertising expenses of the company's sales and proposed projects.
The performance from January to September is outstanding, and the growth for the whole year is still expected.
In the first three quarters, the company achieved revenue of 1.648 billion yuan, a substantial increase of 135.31% over the same period last year, and a net profit of 66.5751 million yuan, an increase of 820.11% over the same period last year. This mainly benefits from the increase in the settlement of Hefei Amber Fifth Ring City and Accord projects. The level of three fees has declined steadily, and the reduction in non-project borrowing has significantly lowered the interest expenditure, offsetting the increase in advertising spending. The company received 3.554 billion yuan in advance from January to September, a substantial increase of 60.94% over the beginning of the period. the accelerated sales of projects in Hefei led to the rapid return of funds and ensured the steady growth of revenue in the next two years. We believe that with the delivery of part of the Amber Ryan Home project in Hefei at the end of the year, the company's performance in 16 years is still expected to achieve higher-than-expected growth.
The impact of the purchase restriction policy is limited, and the demand spillover benefits the three counties.
Hefei issued a purchase restriction policy during the National Day holiday, which requires that within the urban area (excluding four counties and one city), the purchase of 2 sets of registered households in the urban area and 1 set of non-registered households. Subsequently, the continued hot Hefei property market transactions began to decline, multi-week online record transaction volume is zero. But at the same time, the three surrounding counties unaffected by the purchase restrictions have enjoyed demand spillover, achieving a simultaneous rise in volume and price for many weeks in a row. At present, one of the sales and reserve projects of the company is located in the restricted area, namely, Ruian Home in Hefei, Binhu District and plot E1606 in Yaohai District. We believe that the prospects of these projects are still optimistic: among them, Ruian Home has enjoyed a large premium brought about by the previous hot property market, the project has been well removed, Binhu is a new site of the provincial government, and the regional potential is full; the Yaohai site is adjacent to the Shizhong New District of Hefei. At the same time, it is subordinate to subway property, school district and transportation advantages. In addition, the company's other projects on sale (Feidong Amber County, Feidong Amber Manor) and reserve land (Feixi [2016] No. 6) are all located in the three counties around Hefei, and the demand spillover has brought about a rapid rise in regional housing prices. These projects have the full potential to benefit.
Profit forecast and valuation
At present, the company's sales have been greatly accelerated, the three fees have fallen steadily, the projects on sale are of high quality, and the land reserve is sufficient.
Relying on the actual controller Xingtai Holdings, backed by the only financial control platform in the region, the long-term development potential is full.
We predict that the EPS of the company from 2016 to 2018 is 0.56,0.73 and 0.84 yuan per share, and the corresponding PE is 33 times, 26 times and 22 times. At present, the corresponding RNAV of the company's real estate business is 14.39 yuan, taking into account the fact that the company already has the attribute of financial control platform.