Overview of events
E-City released its quarterly report for 2020, showing that the company achieved 780 million yuan in operating income in the first quarter, + 134.9% year-on-year, and 160 million yuan in net profit, + 83.7% in the same period last year.
The results of transformation are revealed, and the quality of management is improved.
2020Q1 achieved an operating income of 780 million yuan, an increase of 134.9% over the same period last year, and a net profit of 160 million yuan, an increase of 83.7% over the same period last year. The company promoted the construction of a scientific and technological innovation service system, strengthened the coordination of internal and external resources, and made remarkable achievements in transforming a new type of science and technology service industry. During the reporting period, the return on net assets and gross profit margin were 2.40% and 67.81% respectively, up 1.06pct and 37.79pct respectively over the same period last year, and the quality of operation improved.
Abundant soil storage and reasonable layout
In 2019, the company realized sales income of 2.25 billion yuan and sales area of 355000 square meters.
By the end of 2019, the company has an area of 1.066 million square meters to be developed and an area of 1.449 million square meters under construction, which is 7.1 times the sales area of the current period. At the same time, as the leading company of science and technology industry real estate, the project layout is in the first-and second-tier cities with strong scientific and educational capacity and good economic condition, and the land reserve is of high quality.
The financial situation is good, and the advantage of low-cost financing is obvious.
At the end of the reporting period, after excluding accounts received in advance, the company's asset-liability ratio and net debt ratio were 52.49% and 43.64%, respectively, and the leverage ratio was low in the industry. On February 27, 2020, 800 million yuan of three-year corporate bonds were publicly issued with an interest rate as low as 3.35%. The overall financing cost in 2019 is 4.76%. Thanks to a good financial position and high-quality asset reserves, the company's financing cost is at a low level in the industry.
Investment suggestion
Electronic City performance rapid growth, adhere to the science and technology service strategy to lead the company's development model innovation, good financial situation. We estimate that the company's EPS for 20-22 years is 0.38, 0.46, 0.54 yuan, corresponding to PE, which is 14, 11.7, 9.9 times, covering for the first time, giving the company an "overweight" rating.
Risk hint
The transformation is less than expected, the scale of sales is declining, and the provision for impairment of inventory affects performance.