Main points of investment:
The double main business management pattern of "real estate + culture". In 2016, the company laid out the tourism, cultural and performing arts industry, acquired 100% equity in Guan ImpressionArt Development Co., Ltd., and established the dual main business pattern of "real estate + culture".
In May 2017, the company signed a strategic cooperation agreement with IDG Capital and Yunfeng Fund to integrate cultural and travel resources together with the capital market. In 2018, the company stepped up its transformation efforts and bought a stake in Viacom, an important strategic partner of Viacom China.
The real estate business is steady and rising, and the project layout is the core city. In 2019, the company achieved a sales area of 108100 square meters, an increase of 80.15% over the same period last year, and a sales amount of 3.914 billion yuan, an increase of 40.35% over the same period last year.
By the end of 2019, the company has accumulated land reserve with a remaining developable construction area of 853200 square meters, and a total planned construction area of about 359300 square meters under construction and proposed construction. The project is located in Shanghai, Hangzhou and Yanjiao, Hebei Province. The main project has entered the sales and settlement cycle, which is expected to drive the performance up. In 2020, the company plans to comprehensively promote the construction of Hebei Yanjiao project, ensure the sale of Sanxiang impression residence (Shanghai Pudong), and strive for the liquidation of Hangzhou Haishang View Mansion and Shanghai Sanxiang Haishang Cloud Mansion. According to our estimates, the remaining values of the three items of Impressionist Mansion, Haishang View Mansion and Haishang Cloud Mansion are 3.398 billion yuan, 2.414 billion yuan and 4.277 billion yuan respectively. In particular, the impression residence of Sanxiang is basically a real scene at the end of 2019, and we expect it to be settled in 2020 at the earliest and 2021 at the latest. We believe that as the above projects enter the pace of sales and completion, the company's real estate sales, settlement revenue and settlement profits are expected to rise steadily.
The impression maintains the leading position in the industry, and the two-way endowment of technology, real estate and culture can be effective. View impression has four major performance brand series: "impression", "see again", "most recall" and "return". At present, there have been 18 public performances, production and signing projects. In 2019, the company signed a new work "impression of the Legend of Huashan", and the four previously signed works "the Road to return to Zunyi", "impression of Dianchi", "impression of Taiji" and "most memories of Shaoshan Chong" entered a key production stage. IP development and building capabilities, strong editing team, excellent competitive brand, the three core advantages help the company to maintain a leading position in the industry. In addition, the landing of the Mango Plaza project jointly developed by the company and Hunan Radio and Television Station on the Binjiang River in Xuhui, Shanghai, as well as the landing of the Weikang Golden staff in Hangzhou, Nanjing, Suzhou, Huzhou, Shaoxing and other places in the Yangtze River Delta region marks the company's green technology real estate + cultural IP two-way empowerment began to highlight results.
Investment advice: give a "neutral" rating. We estimate that the EPS of the company from 2020 to 2021 will be 0.29yuan and 0.44yuan respectively. By June 19, 2020, the company will close at 4.00yuan, corresponding to 14.01times and 9.02times of PE in 2020 and 2021. We give the company a valuation of 15-17 times PE in 2020, with a reasonable value range of 4.28-4.85 yuan, a discount of 31.6% to 39.7% compared with RNAV (7.10 yuan per share), and given a "neutral" rating. Risk tips: 1) the sales and settlement of the real estate development business are not as expected; 2) the promotion of the company's cultural business is not as expected.
