Event one. The company publishes its 2019 annual report. During the reporting period, the company achieved a total operating income of 9.005 billion yuan, an increase of 15.5% over the same period last year, and the net profit belonging to shareholders of listed companies was 875 million yuan, an increase of 6.99% over the same period last year. The company plans to pay a cash dividend of 2.4 yuan (including tax) to all shareholders for every 10 shares in 2019.
Event two. The company publishes its quarterly report for 2020. During the reporting period, the company's total operating income was 1.74 billion yuan, down 46.96% from the same period last year; the net profit belonging to shareholders of listed companies was 102 million yuan, down 82.57% from the same period last year.
In 2019, driven by the increase in real estate transfer income and manufacturing services, the company's revenue increased by 15.63%, and its net profit increased by 6.99%. In the first quarter of 2020, due to the decline in revenue from the real estate industry and import and export trade, the company's revenue decreased by 47.12% (total revenue decreased by 46.96%), and its net profit decreased by 82.57%. According to the company's 2019 annual report: (1) in 2019, the company achieved a total revenue of 9.005 billion yuan. Of this total, real estate rental income was 1.572 billion yuan, an increase of 0.001% over the same period last year; real estate transfer and sale income was 1.551 billion yuan, an increase of 0.74% over the same period last year; and commodity sales income was 3.465 billion yuan, an increase of 0.08% over the same period last year. (2) in 2019, the company realized the contract sales of 115.2653 million yuan and the contract sales area of 17483.96 square meters. In 2019, the development and construction of the Health Pharmaceutical Industry Park progressed smoothly, and the newly developed H10 plot of 96100 square meters of new property was completed. The total construction area of the project under construction in Senlan is 625700 square meters, of which the total construction area of the completed project is 293900 square meters. (3) in 2019, the total construction area of real estate development investment is 7725 million square meters, and the available-for-sale area is 833 thousand square meters (175,000 square meters have been sold). Hold a total real estate area of 445.94 million square meters (rented area of 350.56 million square meters).
According to the company's development strategy, 2020 is the end of the 13th five-year Plan. At the end of the 13th five-year Plan period, the industrial development sector of the park is expected to contribute 40% of the company's profits, the commercial office real estate sector is expected to contribute 30% of the company's profits, the trade logistics services sector is expected to reach 1.8 billion yuan, and the contribution to the group's profits is expected to reach 20%. 25%. The investment sector of the cultural industry is expected to reach 650 million yuan, and the financial services sector is expected to contribute 4 per cent to the company's profits.
Investment advice. Benefit from the construction of free trade zone, raised to "better than the market" rating. The company's vision is to become an innovative free trade park operator and an integrated service provider of the whole industry chain. It is positioned as the leader of service innovation and development, the promoter of global enterprises' external investment and internal introduction, the provider of all-round services of enterprises in free trade zone, and the practitioner of industrial transformation and upgrading. Accordingly, we estimate that the EPS of the company in 2020 and 2021 is 0.90 yuan and 1.04 yuan respectively. We believe that the company will benefit from the process of promoting the free trade zone and receive five major benefits: policy dividend, industrial upgrading, land price revaluation, positioning change and function upgrading, and give the company a dynamic PE valuation of 14-18 times in 2020, corresponding to a reasonable value range of 12.6-16.2RMB, upgraded to "better than the market" rating.
Risk hint: the company's rental and sale business faces the risk of policy regulation and non-smooth business development of the park platform.