The company released 19 reports: 1) 19H1: revenue 3.271 billion / + 10.3%, return to the mother net profit 106 million /-19.1%, mainly due to the increase in management and financial expenses. Deducting non-return net profit-35 million /-127.42%, net operating cash flow 1.395 billion / + 2.3%. 2) 19Q2: revenue 2.373 billion yuan / + 23.5%, return net profit 98 million yuan / + 6.6%, deduct non-return net profit 91 million yuan /-3.3%, net operating cash flow 1.432 billion yuan /-34.4%.
Tongguan kiln project operation promoted the increase of revenue and gross profit in Hunan, and the growth of commercial housing sales was steady. From the perspective of ① by industry, the company's revenue from 19H1 commercial housing sales is 1.975 billion yuan / + 9.7%, the gross profit is 41.57% / + 0.98pct; the revenue from other businesses is 1.295 billion yuan / + 14.1%, and the gross profit is 8.73%/-2.2pct. ② sub-regional point of view, Beijing area achieved revenue of 353 million yuan / + 79.1%, gross profit margin 25.77% plus 19.97pct; Hunan area revenue of 872 million yuan / + 23.27%, gross profit 27.55%/+15.7pct; Shanghai area revenue of 463 million yuan /-49.3%, gross profit margin 44.45%/-5.8pct; overseas area revenue of 384 million yuan / + 489.9%, gross profit margin 35.48%/+32.9pct.
The completion of the cultural travel project has led to an increase in financial costs, which has put some pressure on short-term 19H1 performance. 1) 19H1: gross profit margin 28.6%/-1.9pct, period expense rate 29.6%/+4.2pct, mainly due to the increase in financial expense rate. Among them, the sales expense rate 7.2%/-0.1pct, the management expense rate 9.0%/+1.0pct, the financial expense rate 13.4%/+3.3pct, mainly due to the completion and delivery of the literature and tourism project, 19H1 net interest rate 3.3%/-1.2pct. 2) 19Q2: company gross profit margin 31.7%/-1.4pct, overall period expense rate 25.3%/+1.5pct. Among them, the sales expense rate 6.8%/+0.31pct, the management expense rate 7.2%/-0.1pct, the financial expense rate 11.3%/+1.3pct.
The culture and tourism industry is the focus of the company's future development, and the landing of the Xining Children's Dream Park project continues to promote the expansion of the literature and tourism sector. ① Tongguanyao Ancient Town: grand opening in August 2018, covering 5D cinemas, museums, performing arts centers, hotels, inns and other dozens of forms of large-scale cultural and tourism projects, is the national tourism preferred project, key projects in Hunan Province. The second phase of the three major literature and tourism products have been launched in 19H1; ② Jiuzi Ancient Town: the East Coast Scenic area has been fully opened at the end of 18, while the West Bank has completed the completion and delivery, the Ocean Show and Green Heart Valley Hotel have been officially opened, and the ancient town plans to open the park as a whole in Q3 in 19; ③ Langzhong Ancient City: the company succeeded in mergers and acquisitions in 2018 and officially opened in early 19, as of 19H1 passenger traffic and income increased significantly compared with the same period last year. ④ Xining Children's Dream Park: it has been fully equipped inside and outside for 18 years and opened for operation in August 19. ⑤ South Korea Fairview Villa: it has been approved by the local Taoist Council during the reporting period, and has obtained the "Xinhua Union Fairview Villa Tourism Park Project Development license" of Jeju Special Autonomous Road in March 2019. ⑥ Beiwai Xining International Middle School & Changsha Beiwai Yali International Middle School: the company tries the education industry in order to realize the linkage of education, culture, tourism and other industries.
The real estate business 19H1 has not yet been taken by macro-control, and it will still be used as the support of the company's performance and cash flow during the transition period. In the first half of 2019, under the influence of the national macro-control policy, the company took the land more cautiously, during which no new land reserve was added, with an area of 2.985 million square meters and a completed delivery of 804000 square meters. The company has signed a contracted sales area of 228200 square meters, sales amount of 2.95 billion yuan, settlement area of 157400 square meters, settlement amount of 1.975 billion yuan. Considering the long development period of the cultural travel project, we believe that the company's real estate business is still expected to provide documentary performance and cash flow support for the company in the future, and realize the steady transformation of the cultural travel project.
Investment advice: buy-An investment rating. The company's stock literature and tourism projects, such as the ancient town of Yuzi and Tongguan kiln in Changsha, have gradually matured, and projects such as Langzhong Ancient City, Xining Tourism City, and Jinxiushan transfer in South Korea have progressed steadily, and the "literature and tourism + finance" business is expected to enter a continuous harvest period. It is estimated that the return net profit of the company from 2019 to 2021 is 1.37 billion yuan / 1.58 billion yuan / 1.79 billion yuan, the EPS is 0.83 shock 0.94 yuan, the PE is 6.6x/5.7x/5.0x, and the target price is 5.50 yuan for 6 months.
Risk hints: real estate market competition and policy uncertainty, cultural travel project investment, long development cycle, climbing less than expected risk, macroeconomic risk.