Event: Nandu property released its semi-annual report for 2020. 2020H1's operating income was 660 million yuan, up 12.83 percent over the same period last year, and its net profit was 67.9966 million yuan, an increase of 21.34 percent over the same period last year, deducting 54.9614 million yuan from non-net profit, an increase of 29.11 percent over the same period last year. 2020Q2's revenue was 327 million yuan, an increase of 11.7% over the same period last year, and its net profit was 37.6536 million yuan, up 30.22% over the same period last year, deducting 30.3864 million yuan from non-net profit, an increase of 41.22% over the same period last year.
Comments:
The cost is well controlled and the newly signed area is growing steadily. As of June 30, 2020, the company has signed a total of 530 projects with a total signed area of 63.1033 million square meters, 37 newly signed property service projects in the first half of 2020, with a newly signed area of about 2.9419 million square meters, and 6 newly signed field service contracts; the newly signed number of consulting contracts is 1. The company's gross profit margin increased by 1.08pct to 23.18% compared with the same period last year; the sales expense rate decreased by 1.04pct to 0.89%, mainly because the epidemic affected market expansion; the management expense rate decreased by 0.04pct to 8.19%; the R & D expense rate decreased by 0.02pct to 0.08%, mainly because the company's information system was in the period of adjustment and maintenance; and the financial expense rate increased by 0.01pct to-0.09%.
Strengthen regional advantages and expand the field of urban space services. Focus on expansion has been stationed in provinces and cities, strengthen the company's regional advantages, accelerate the layout of Beijing, Tianjin and Hebei, enter Hebei Province for the first time, and expand the next city nationally; the company actively broadens the market segmentation track and helps the city's public space services. a number of non-residential projects, such as Xia Yan Film and Television Cultural District, Hangzhou Iron and Steel Base, Xi'an Hi-Tech Wisdom Industrial Park, Jiangsu multi-land community and street sanitation, Wuhu County High-speed Railway Bay South Station and so on.
Improve the quality of service to lay the cornerstone of the company's development. In 2020, the company will upgrade the service quality management system and improve the service quality of various projects throughout the country. The company sets the "Yuejia Plan" quality improvement goal, starting from the basic business quality and community service activities, to further improve customer responsiveness, problem-solving efficiency and emergency response, and always make the owners' satisfaction reach a high level.
Investment strategy: we predict that the company's return net profit from 2020 to 2022 will be 1.42 billion yuan, an increase of 24.4%, 20.3%, 17.8%, and maintain the "buy" rating.
Risk hints: the risk of rising labor costs, the risk of not fully recovering property fees, the risk of intensified market competition, and the risk of real estate regulation and control.