Event: the company reported revenue of 1.82 billion yuan in 2019,-56% year-on-year, net profit of 374 million, down 47.1% from the same period last year, and EPS of 0.15 yuan per share, down 47.1% from the same period last year.
The main completion in the first half of the year is indemnificatory apartment, and the second half of the year is expected to achieve high growth: the company completed 370000 square meters in the first half of the year, a sharp increase of 187% over the same period last year, but the company's settlement income has declined. The main projects completed in the reporting period are the Jiuting indemnificatory apartment project and the Dongjing indemnificatory apartment project. The company's advance income is nearly 3 billion, and the settling resources are still abundant. The decline in revenue in the first half of the year has been significantly narrower than that in the first quarter, and growth is expected in the second half of the year.
The project under construction is progressing steadily, and the commercial housing project with high gross margin is about to enter the market: the company with a total construction area of 740,000 square meters will seal the structure of the second phase of the Bay Valley Science and Technology Park and complete the preparatory work for fine decoration. The exhibition of the Luxiangyuan project has begun, of which the Huangpu Luxiangyuan commercial housing project plans to invest 9.85 billion yuan, with a total construction area of 300,000 square meters, with an average cost of only 32833 yuan per square meter and a capacity area of 184,000 square meters, while the estimated price is more than 150000 per square meter, with a total value of nearly 30 billion, which is expected to be sold in the future.
The investment business continues to grow rapidly, and the exit rate of venture capital funds is high: the listed companies owned by the company include Shentong Metro, Everbright Bank, Western Securities, CIC Capital, etc., with a total market capitalization of about 5.976 billion yuan. The company's venture capital fund Chengding Fund operates smoothly, focusing on investment in energy conservation and environmental protection, smart city, intelligent manufacturing and other industries. Four new projects were completed in the first half of the year, with a return of 183.39%.
The Yangtze River Delta has outstanding geographical advantages and Shanghai's state-owned assets reform continues to advance: the company actively participates in the construction and operation management of the new free trade pilot zone, the Yangtze River Delta integrated development demonstration zone and related projects of Import Expo, and is expected to continue to benefit from the improvement of Shanghai's location advantages. Shanghai's comprehensive reform plan for state-owned assets has been released, and the company is expected to benefit from Shanghai's state-owned assets reform.
Investment advice: the company actively layout Yangtze River Delta integration construction, and is expected to benefit from Shanghai state-owned assets reform, although the short-term completion structure for indemnificatory apartment-based performance pressure, but quarter-on-quarter improvement, the future as high-margin projects enter the harvest period, the company's performance is expected to continue to improve, we expect the company's 2019-2021 EPS of 0.61,0.89 and 1.25 yuan, to maintain the "buy" rating.
Risk hint: the real estate regulation and control policy is higher than expected, and the integration policy of the Yangtze River Delta is not as expected.