Main points of investment:
Both operating income and profit margin rose. The company's 2020Q1 operating income was 775 million yuan, an increase of 134.85% over the same period last year, and the increase was mainly due to the increase in the carry-over of real estate sales. The net profit belonging to shareholders of listed companies was 163 million yuan, an increase of 83.69%, and basic earnings per share was 0.15 yuan per share, an increase of 87.5% over the same period last year. In terms of profit margin, the gross profit margin carried forward by the company's 2020Q1 was 67.81%, an increase of 37.79% over the same period last year, and a net profit margin of 21.03%, a decrease of 6.56% over the same period last year. We believe that the decrease in the parent net interest rate is mainly due to the increase in the amount of real estate projects carried forward by the company in the current period, the corresponding increase in business tax and additional year-on-year increase, and the decline in non-operating net income in the current period compared with the same period last year.
The total assets grew steadily, the debt ratio increased slightly, and the cash flow improved significantly compared with the same period last year. As of the end of 2019, the total assets of 2020Q1 were about 14.93 billion yuan, an increase of 5.07% over the end of 2019. The net assets belonging to shareholders of listed companies were 6.782 billion yuan, an increase of 2.46% over the end of 2019. In terms of debt ratio, the company's asset-liability ratio was 53.15%, an increase of 1.26 percentage points over the end of 2019, and the interest-bearing debt ratio was 32.92%, an increase of 1.10 percentage points over the end of 2019. In terms of cash flow, the net cash flow generated by the company's 2020Q1 operating activities was-346 million yuan, an increase of 1.349 billion yuan over the same period last year, and the net operating cash flow improved significantly compared with the same period last year, mainly due to the increase in house payments and the decrease in taxes and fees in the current quarter.
Guoshou real estate cooperation to form a partnership fund to purchase assets. In November 2019, the company joined the Guoshou Real Estate Investment Management Co., Ltd. with its own funds and the electronic city Huaping Dongjiu and China Life Insurance Company Limited Insurance Company to form a partnership fund. The partnership fund will set up a project company to acquire the assets of the companies under the Electronic City Group through overseas investment, with Guoshou Real Estate and the electronic city Huaping Dongjiu as the general partner of the fund. The total size of the fund to be raised shall not exceed 4.302 billion yuan. Direct or indirect acquisition of six assets held by Beijing Electronics City Co., Ltd., Beijing Electronic City IT Industrial Park B5 factory project, Zhongguancun Electronic City International Electronics headquarters Phase III project, Electronic City IT Industrial Park C2A plant project, Electronic City Xiqing 7 West District Project (Dingfeng Center) Project, Electronic City Xiqing 7 West District Project (Dingfeng Center) Project, East District Project (Dingchuang Center) Project, Xiqing 7, Electronic City.
Stock option incentive arouses the enthusiasm of management. On August 5, 2019, the company completed the grant of stock options, granting 999.74 million stock options to 91 incentives at an exercise price of 6.78 yuan per share, mainly for senior executives and core employees. The three exercise periods are 24 months, 36 months and 48 months from the date of grant, respectively, and the number of exercisable rights each time is 1/3 of the grant. Each exercise period will carry out double assessment of the company's annual performance and incentive target performance.
Investment advice: "better than the market" rating. With reference to the company's stock option performance target, we estimate that the company's EPS in 2020 will be 0.40 yuan per share, which will give the company a valuation of 15-18 times PE in 2020, corresponding to a market value of 67-8.1 billion yuan, a reasonable value range of 6.01-7.22 yuan, and a PEG of 0.86-1.04 in 2020. Risk hint. The acquisition of company assets by the occupation fund has a great impact on the company's performance, and the acquisition time and the settlement rhythm of the company's income need to be paid attention to.