incident. The company published its 2019 annual report. During the reporting period, the company achieved operating income of 3,352 billion yuan, an increase of 21.40% over the previous year; net profit attributable to shareholders of listed companies was 1,085 million yuan, an increase of 11.03% over the previous year. The company distributed a cash dividend of 3.10 yuan (tax included) to all shareholders for every 10 shares in 2019.
In 2019, driven by an increase in carry-over sales revenue, the company's revenue increased by 21.40%; in the same period, Guimu's net profit increased 11.03%. In 2019, the company achieved a total revenue of 3.352 billion yuan. Among them, real estate sales revenue was 1,756 million yuan, an increase of 45.97% over the previous year; real estate rental revenue was 1,435 million yuan, an increase of 2.94% over the previous year; and hotel apartment service revenue was 153 million yuan, a year-on-year decrease of 3.06%.
According to the company's 2019 annual report, new construction and renewal projects: (1) Jinqiao Zhigu (4-02 plot) project (formerly known as Yudu Workshop V) started in September 2019; (2) Dukoufang Phase II (34-06) obtained a certificate of production and delivery of operation within 2019; (3) the OFFICE PARK II subway sector project (T3-5) completed the overall construction of the project and initiated the work related to completion, acceptance and filing; (4) Lalaport LaBaodu Commercial Complex Project (T4-03), the main physical object of the project Project volume construction Basically completed; (5) the Biyun Zun Residence (S11 plot house) project, completed the construction of the main structure and submitted pre-sale license application materials; (6) with the Dou Workshop Phase III (31-02) project, the project is progressing according to plan; (7) the East, South and North District Project of the New Materials Innovation Base of the Beijiao Future Industrial Park was completed. It is expected that the park will open in August 2020.
In the first half of 2019, the company actively participated in the establishment of the New Area Science and Innovation Parent Fund. The parent fund is now officially in operation. In the second half of 2019, the company made every effort to promote the establishment of the Pudong Intelligent Manufacturing Industry Investment Fund (proposed scale of 2 billion yuan, initial phase of about 1 billion yuan). The company adhered to its position from a high starting point, built a fund brand through cooperation between central and local authorities, and successfully introduced the leading domestic intelligence company CRRC Group as the fund sponsor. In 2019, the Lingang Biyun 10 project maintained a good sales trend, with a cumulative total of about 1.3 billion yuan in revenue throughout the year.
Investment advice. The key project, Biyun Zun Residence, was pre-sold this year and was rated “better than the market”. The company is mainly engaged in the development, operation and management of Shanghai Jinqiao Economic and Technological Development Zone. The company gradually transitioned from an integrated park developer to an emerging urban development operator. The company adopts a rent-based business model combining leasing and sales. The company owns about 2.35 million square meters of various investment properties such as factories, office buildings, residences, shops, and educational and leisure facilities. According to the company's 2019 annual report, in 2020, the first batch of Biyun Zun Residence (S11 plot residential) projects opened for pre-sale, making every effort to return the funds and ensure that the houses were handed over by the end of March 2022.
We expect the company's EPS for 2020 and 2021 to be $1.22 and $1.52, respectively. According to the current dynamic PE valuation of relevant comparable companies, we gave the company 14-18 times the dynamic PE in 2020, with a corresponding reasonable value range of 17.08-21.96 yuan, maintaining the company's “superior to the market” rating.
Risk warning: The company's rental and sales business faces the risk of interest rate increases and policy regulation, as well as the risk of economic downturn.
