Main points of investment:
1. For the first time, it will be cautiously overrated, with a target price of 4.00 yuan. It is estimated that the 2019, 2020 and 2021 EPS will be 0.50,0.65 and 0.89 yuan respectively, with growth rates of 21%, 29% and 36%, respectively. The company's real estate business and special vehicle manufacturing business go hand in hand, and real estate business sales are expected to break through the scale bottleneck and achieve great-leap-forward growth. It is expected that the reasonable PE valuation in 2019 is 8x, corresponding to the target price of 4.00 yuan.
two。 The company is a medium-sized regional real estate developer, the scale breakthrough is the bottleneck of its development and expansion. 98% of the company's operating revenue comes from Chongqing, Chengdu and Wuhan. According to Carey's data, sales reached nearly 55 billion yuan in 2018. The company has laid out more than 13 second-tier core cities along the Yangtze River economic belt, and has formed four regional expansion models with Shanghai, Wuhan, Chengdu, and Chongqing as the core cities. While actively expanding the land reserve, obtaining new resources through the first-and second-tier linkage is expected to push the company to break through the scale bottleneck and plan sales growth of 30% to 50% in 2019, moving to the next level.
3. The special-purpose vehicle manufacturing business is leading in China and has become an important source of the company's performance. In 2018, the company's special-purpose vehicle sector achieved an annual operating income of 816 million yuan, an increase of 35%, maintaining a trend of rapid growth. And the bulletproof armored vehicle business remains stable, with a market share of more than 40%, ranking first in the industry for 18 years in a row, and integrated vehicle business revenue has also increased significantly. Special-purpose vehicle manufacturing business to maintain a strong stability, is an important supplement to the company's performance.
4. The company has established a sound incentive system to ensure the smooth realization of future performance growth. In 2019, the company granted stock options and restricted stock to its core employees, and took performance appraisal as the exercise condition; the company implemented a common growth plan, which was extracted from net profit and linked to growth as the salary of employees participating in the plan, which greatly enhanced the enthusiasm of the employees.
5. Risk Tip: project expansion in the new area is lower than expected
