19H1 revenue + 63%, performance + 11%, real estate carry-over increased, but gross profit margin decreased.

19H1 achieved revenue of 1.43 billion yuan, year-on-year + 62.5%; net profit of 440 million yuan, + 11.1% year-on-year; basic earnings per share of 0.4 yuan, + 11.1% year-on-year; gross profit margin and net profit margin of 50.3% and 31.1%, respectively, year-on-year-17.6pct and-14.4pct, respectively, including gross profit margin of real estate business and leasing business-45.9pct and-8.9pct, respectively. The total expense rate of the three items is 6.2%, which is lower than that of the same period last year-1.9pct. In terms of revenue structure, the company's real estate sales, real estate leasing and hotel business achieved revenue of 6.6,7.0 and 70 million respectively over the same period last year, which was + 569.7%,-0.7% and-6.4% respectively compared with the same period last year. The company's high revenue growth is mainly due to the fact that the Biyun 10 project entered a centralized delivery period, with a confirmed income of more than 600 million yuan (corresponding to a net profit of 130 million yuan). The performance growth rate is lower than the revenue growth rate, mainly due to the rapid decline in the gross profit margin of the real estate and leasing business, the land value-added tax caused by the concentration of 10 projects, and the investment income of 30 million yuan,-33.2% compared with the same period last year. 19H1's asset-liability ratio and net debt ratio are 55.3% and 51.0%, respectively, compared with the same period last year-2.0pct and + 2.8pct, respectively, still at a low level in the industry.

2.37 million square meters of leasable property, contribute to stable cash flow, enter the centralized delivery period, profit can be expected.

By the end of 19H1, the company could rent 236.7 square meters of property area, and 19H1 realized rental income of 700 million yuan,-0.7% compared with the same period last year; owned 1056 serviced apartments, with income of 70 million,-6.4% compared with the same period last year; hotel and rental income totaled 770 million yuan, achieving the annual rental income target of 1.52 billion yuan. In addition, the company owns 348,000 square meters of leased land and is still strengthening the construction and operation of investment properties. These high-quality resources can create stable and lasting rental income for the company. The company's cash flow is relatively stable, 19H1 realized operating cash inflow of 1.13 billion yuan, + 5.5% compared with the same period last year, completing the annual plan of 46.8%. Considering the strategic opportunity of the transformation from the edge of the central city to the urban center in the expansion of Shanghai's urban boundary and the sharp rise in land prices in first-tier cities over the past 16 years, the company is expected to increase the value of high-quality properties. In terms of real estate projects, the three phases of the Lingang Biyun 10 project have been launched with a good housing supply removal rate of 81%, with a cumulative collection of about 2.11 billion yuan. 18-20 years belong to the concentrated delivery period of the project, which will continue to promote the release of profits.

The secondary development will activate the stock resources. S11 may be pre-sold soon, which will provide rich performance support in the future.

Fifteen years later, the company's "secondary development" officially set sail, intended to promote the transformation of the industrial structure and invigorate the land. At present, the investment preparation work for the Office Park Ⅱ subway block project (lot T3-5) has been carried out; the construction of the Ⅲ phase of the workshop has been completed, and the interior decoration has been completed by 80%; the work has been carried out orderly before the start of the project Ⅴ (plot 4-02); the main structure of the S11 plot residential project Biyunzun residence has been capped, and some sales of the project will provide rich performance support. The acceptance of the above-ground structure of the project in the east, south and north areas of the new material innovation base of Beijiao Future Industrial Park has been completed by 70%. In addition, the company has actively participated in the establishment of the Science and Technology Innovation Mother Fund in the New District, and has been officially put into operation, focusing on the field of intelligent manufacturing. At the same time, the company makes every effort to promote the establishment of Pudong intelligent manufacturing industry investment fund. At present, it is in close contact with more than 20 potential partners, investors and leading intelligent manufacturing enterprises, and basically determines the composition of partners and funds.

Investment advice: high revenue, small increase in performance, maintain the "recommended" rating

As the main undertaker of the construction of Jinqiao Development Zone, Pudong Jinqiao has 2.72 million square meters of high-quality self-owned properties and leased land near the Central District of Pudong, Shanghai, including leasing of industrial factories and R & D offices. In addition, the company is facing the strategic opportunity of changing from the edge of the central city to the city center in the process of urban boundary expansion in Shanghai, holding high-quality properties to enhance the value of high-quality properties, and gradually accelerate the secondary development through the acquisition of properties in the area. invigorate the stock resources. Taking into account the accelerated settlement of Biyun 10 and the imminent pre-sale of S11 or pre-sale, we maintain the company's earnings per share forecast of 0.98,1.11,1.26 yuan for 19-21 years. In view of the current downward valuation level of the industry as a whole, we lowered the target price to 15.68 yuan according to the 19-year target PE16, maintaining the "recommended" rating.

Risk hint: real estate regulation and control policy tightened more than expected and industry financing policy tightened more than expected.