The company's parent net profit continues to grow, the proportion of net investment income is high, the financial is sound, and the dividend yield is high. In 2019, the company achieved a net profit of 1.842 billion yuan, an increase of 92.21% over the same period last year. In terms of the proportion of operating profit, the company's net investment income accounted for 68% in 2019, which shows that the operating profit contributed by the company's net investment income in 2019 is much higher than that contributed by other businesses. In recent years, the level of corporate debt ratio has decreased year by year. 1Q2020, the company's asset-liability ratio and the asset-liability ratio excluding advance receipts are 54.72% and 29.42% respectively. In recent years, the company's return on assets has improved and its dividend yield has remained high.
1Q2020, the company's annualized ROE is 19.45%. In 2019, the company's dividend yield was 4.62%.
Nanjing real estate market is running well, and the company's development business is developing steadily. From January to April 2020, commercial housing sales in Nanjing totaled 61.892 billion yuan, an increase of 17.0% over the same period last year. On May 21, 2020, the company announced that it had won the NO.2020G15 plot in Nanjing for 2.04 billion yuan. The total land area of the site is 3.98 million square meters, and the plot ratio of 1.01 ≤ is ≤ 2.6.It is the second class residential land. As of the reporting date, the total project planning capacity of the company's reserve project is 1.698 million square meters.
In a virtuous circle of equity investment, VCs highlight the "medical and health" brand, and the listing process is accelerated under the registration system. The company focuses on medicine and health, artificial intelligence and other strategic emerging industries, screening out high-quality enterprises that meet the standards to implement equity investment. According to the company's 2019 annual report, the company invested 698 million yuan to set up the second phase of Xinjun Innovation Fund in 2019. According to the company's 2019 annual report, the company's total outbound investment totaled 616 million yuan in 2019, an increase of 135.19% over the same period last year. In 2019, the company's investment in Shuoshi Biology has been listed in Science and Technology Innovation Board and achieved a high premium. At present, Guangzhou Agricultural and Commercial Bank of China, Jinpu Garden, Seiters and other projects are in the process of applying for listing. Ellis has applied for the listing of Kechuang Board, and many projects such as Brocade Information, Jiangeng Medicine and other projects are planned to be listed on the Kecheng Board. In 2019, the company realized investment income of 1.406 billion yuan, an increase of 134.94% over the same period last year, and realized fair value change income of 663 million yuan. By the end of 2019, the total book value of equity held by the company was 13.229 billion yuan.
Investment advice. Equity investment relies on four major investment platforms, "better than the market" rating. The company is mainly engaged in real estate and municipal business, equity investment business. The company continues to improve the system construction of the four major investment platforms of "Nanjing Hi-Tech, Hi-Tech Innovation, Hi-Tech loan and Hi-Tech Xinjun", focusing on equity investment in strategic emerging industries such as medicine and health, artificial intelligence and so on. We estimate that the EPS of the company in 2020 and 2021 will be 1.18 yuan and 1.28 yuan respectively. With reference to the average valuation of the relevant comparable listed companies in 2020, the company is given 9-11 times dynamic PE in 2020, and the corresponding reasonable value range is 10.62-12.98 yuan, maintaining the company's "better than the big market" rating.
Risk hint: the company faces the risk of raising interest rates and policy regulation, as well as the risk of unsuccessful transformation; the investment income gained by the company's stake in the Bank of Nanjing may decline because the profit of the Bank of Nanjing falls short of the target.
