Jindi Merchants issued a profit pre-announcement: the company's net profit is expected to grow by at least 65% in 2019.
Comment
Performance has entered a period of rapid growth. Jindi Merchants forecast that the growth rate of the company's return net profit in 2019 is not less than 65%, that is, the return net profit is not less than 3.717 billion yuan. The obvious improvement in the company's performance is mainly due to the expansion of the settlement scale, while the joint venture company contributes more investment income. Jindi Merchant projects are located in the core first-and second-tier and some hot third-tier cities, the company takes the lead in land cost and financing cost, and the gross profit margin of the project is high.
Rapid growth in sales and strong performance lock-up. In 2019, the company achieved contracted sales of 63.662 billion yuan, an increase of 30% over the same period last year; a sales area of 3.1375 million square meters, an increase of 39% over the same period last year; and an average sales price of 20291 yuan per square meter. The company's sales growth continues to be eye-catching, with a compound growth rate of 42% from 2014 to 2019. The sales resources accumulated by the company in the past few years have laid a solid foundation for future performance settlement.
With the active acquisition of land, the scale of land reserve has increased steadily. By the first half of 2019, the company's land reserve was 1541 million square meters, up 15% from the same period last year. In terms of cities, 25% are located in first-tier cities, 65% in second-tier cities such as Nanjing, Qingdao, Hangzhou, Wuhan, Xi'an and Tianjin, and 10% in third-tier cities such as Huaian, Xuzhou and Taicang. In the first half of 2019, the company added 13 new projects, with a total construction area of 2.45 million square meters, an increase of 170% over the same period last year, and the proportion of area equity was 53%. The total land price was 25.22 billion yuan, an increase of 163% over the same period last year, and the proportion of caliber equity was 55%. The average price of land was 9930 yuan per square meter, down 3% from the same period last year.
With the rapid development of industrial park business and proprietary commerce, the rental income in the future is considerable. In terms of industrial parks, the company is currently operating successfully in the first and second phases of Shenzhen Weixin Software Science and Technology Park, with a rental rate of 100%. The company also has a number of industrial park projects under development in Shanghai. On the commercial side, the company focuses on the layout of the core first-and second-tier cities, the format covers office buildings and shopping malls, and the company's rental income is considerable in the future.
Investment suggestion: Jindi merchants look forward to buying and taking land, focusing on the layout of the core first-and second-tier cities, with abundant land reserves and low costs. at present, the scale of land reserves exceeds 1500 million square meters. At the same time, the company also holds a large number of high-quality commercial and industrial park properties in core cities, and rental income will continue to rise in the future. It is estimated that from 2019 to 2021, the company's EPS is 0.24,0.30,0.37 yuan respectively, and the corresponding PE is 5.32,4.28,3.45 times respectively, maintaining the "buy" rating.
Risk hints: industry sales fluctuations; policy adjustments lead to operational risks (shed reform, regulation, tax policy, etc.); changes in financing environment (mortgage, development loan, interest rate adjustment, etc.); enterprise operational risks (personnel change, construction, land acquisition, etc.); exchange rate fluctuation risk.