"Development + holding" helps to operate more soundly in the future, covering for the first time the steady growth of sales of gold land merchants with a "buy" rating, focusing on the layout of the core first-and second-tier cities. The company has relatively rich experience in commercial and industrial park operation, obvious advantages in land acquisition, low cost and effective protection of profitability; at present, the company has abundant land reserves, which can meet the development needs in the next 3-4 years. At the same time, the company actively increases the amount of property held in the core cities, and the rent growth is considerable; the "development + holding" model promotes the company to operate more soundly in the future. We estimate that the net profit growth rate of Jindi Merchants from 2020 to 2022 is 14.39%, 14.70% and 14.47% respectively. The current share price is 4.8,4.2 and 3.7 times corresponding to PE, and the "Buy" rating is given for the first time.
Intensive cultivation of real estate development and broad access to resources
Compared with the group, Jindi Merchants focus on intensive farming and pay more attention to profit than scale growth. In 2019, the company's sales volume was 63.7 billion yuan, an increase of 30% over the same period last year. The company takes land actively, and the cumulative land area of the company from 2015 to 2019 is 1.7 times of the sales area. Jindi Merchants has excellent investment capacity, in addition to bidding and hanging land, excellent commercial and industrial park operation experience makes the company have more advantages in obtaining complex projects.
Increase the development and operation of holding property, and the prospect of rent increase is promising.
The company is committed to becoming a commercial real estate and comprehensive national developer and operator for a long time. The company has said that in the future, investment will maintain sales, hold about 85% and 15% of properties, and develop high-potential complex, old renovation and business park projects with high returns and increased capital value. 1) Commerce: at the end of 2019, the company has 1.5 million square meters of commercial properties, and it is expected that about 1 million square meters of new commercial projects will be put into operation in the next 4 years, which will be distributed in nine cities, including Beijing, Shanghai and Nanjing; the rental income of commercial properties is expected to increase from 500 million yuan in 2019 to 2 billion yuan in 2020, a three-fold increase compared with the same period last year; 2) Industrial Park: the company also has an industrial park of more than 1 million square meters.
Risk tips: industry sales fluctuations; policy adjustment leads to operating risks; changes in financing environment; enterprise operation risk; exchange rate fluctuation risk; monetization of shed reform is not up to expectations.