Main points of investment
Department store starts, layout logistics real estate, after the withdrawal of state-owned shares, the equity has been replaced several times, the current equity concentration is high. Dongbai was founded in 1957 and has gone through the stage of restructuring of state-owned enterprises. Its business has expanded from commercial retail to areas such as warehousing and logistics. In 2019, its income is 4.1 billion yuan / + 36.81%, and its net profit is 330 million yuan / + 26.02%. The net profits of commercial retail and warehousing logistics are 1.12 yuan and 221 million yuan respectively. In 2013, the actual controller of the company was changed to Zheng Shufen, and her son Shi Wenyi was the chairman of Fujian Zhonglian Real Estate. A total of 52.62% of shares were held by the actual controller of 20Q1 and those who acted in concert.
Commercial retail Fuzhou accounts for 50%, and the Lanzhou market will be opened up in 2019. At present, Dongbai operates nine department stores or shopping centers in four cities, including Fuzhou and Lanzhou, with a construction area of nearly 800000 square meters, of which it holds 410000 square meters, with an income of 3.187 billion yuan and a gross profit of 603 million yuan in 2019. As a veteran department store in Fujian, the market share of Dongbai Fuzhou is more than 50%, and the location advantage of the core store Dongbai center is irreplaceable.
High-end warehousing is in short supply, with a market gap of 100 million square meters. The per capita logistics real estate area in China still lags far behind that of developed countries (0.7 square meters per person in China, 4 square meters in Japan and 3.7 square meters per person in the United States). The explosive development of e-commerce makes warehousing in short supply, especially in high-bid warehouses with higher efficiency. At present, the area of the high bid warehouse is about 50 million square meters, and according to DTZ's estimate, the gap is still about 100m square meters. In 2019, the logistics real estate developer Yi Shang mahogany listed in Hong Kong, the current development and management area of 17.2 million square meters, market capitalization of more than 50 billion Hong Kong dollars, PE center 30 times.
Relying on the "investment and construction recruitment and withdrawal management" model, deepen the cooperation with Blackstone Group Inc Group, and constantly expand the warehousing and logistics territory. By the end of 2019, Dongbai Logistics owned and managed 12 logistics projects with a construction area of 1.3409 million square meters (including those to be built and under construction), covering Beijing-Tianjin-Hebei, Yangtze River Delta, Dawan area and the central and western core areas of Belt and Road Initiative. Although the contribution of logistics business income is still limited, with an income of 63 million yuan in 2019, the investment income contributed by withdrawing the project is considerable through the mature cooperation with Blackstone Group Inc Group, which is 2.26 yuan in 2019 and 331 million yuan in 2019. It is expected that through the combination of weight and weight model, the development and management scale of Dongbai Logistics is expected to expand three times in the next three years, thus contributing more profits to the company.
Investment suggestion: commercial retail business is stable and improving, and the medium-term scale of warehousing and logistics business is close to that of Yi Shang mahogany. Based on the classified plus total valuation method, the replacement value of the company's main assets is about 13.482 billion yuan, and the company's market capitalization is 4.374 billion yuan on June 4th.
From 2020 to 2022, it is estimated that the EPS is 0.42,0.60 and 0.92 yuan respectively, and the corresponding PE is 11.62,8.13,5.30 times respectively. We are optimistic about the development of the company, covering it for the first time and giving it a "prudent overweight" rating.
Risk hints: retail market demand has dropped sharply, logistics market demand has dropped sharply, logistics land supply has been substantially tightened, and property value has decreased.