Event: on August 28, the company released its semi-annual report 2020: the company achieved operating income of 561 million in the first half of 2020, + 21.78% of the same period last year, and net profit of 8.8433 million,-95.95% of the same period last year.
Revenue growth came from the carry-over of real estate projects, and net profit decreased significantly due to a large decrease in non-recurrent income in the current period. 1) during the reporting period, the company achieved operating income of 561 million, year-on-year + 21.78%. Among them, the company's main business real estate development business 396 million (the same period last year 283 million), housing leasing 126 million (124 million in the same period last year), structurally The growth of the company's operating income in the first half of the year is mainly supported by the carry-over income of the real estate development business. 2) during the period, the company's parent net profit decreased significantly, mainly due to the non-operating income of 394 million yuan generated by the company's disposal of equity in the joint venture company in the same period last year.
Development business and steady operation of commercial real estate
In the first half of the year, although affected by the epidemic, the company still maintained sound operation at the operational level, with the real estate development sector realizing contract sales area of nearly 15700 square meters; contract sales of about 340.7544 million yuan; commercial real estate sector, the company has leased real estate area of 112300 square meters during the period; the cumulative contract rent is about 120.7961 million yuan. At the same time, in the first half of the year, the company does not add land reserves, there are no new construction and completed projects, the transformation direction is clear.
According to the announcement on June 11, the thirty-second interim meeting of the Seventh Board of Directors of the Company and the annual general meeting of shareholders in 2019 approved the addition of Mr. Mei Zhiming and Ms. Zhang Jiajing as non-independent directors of the Seventh session of the Board of Directors of the Company. Mr. Mei Zhiming is the co-founder and CEO of GLP. In this restructuring of the board of directors, Mr. Mei Zhiming not only joined the company's board of directors as a non-independent director, but also served as the chairman of the Strategy Committee to control the overall situation, which may mean that the cooperation between GLP and Wantong will be further deepened. in the future, it will enable the transformation and upgrading of Wantong in the fields of capital market, asset development, operation and management.
Financial health promotes transformation and upgrading, and continuous buyback shows confidence
The main results are as follows: 1) since 2016, the company's interest-bearing liabilities have decreased significantly, and the asset-liability ratio has decreased year by year. By the end of the reporting period, of the 2.37 billion interest-bearing liabilities of the company, the interest-bearing liabilities due within one year were only 116 million, the book monetary funds reached 2.146 billion, the capital was sufficient and the debt was low, and the burden of subsequent transformation was small. 2) on December 27, 2019, the company's board of directors examined and approved the share buyback plan to repurchase 250 million to 500 million yuan of the company's shares. On April 21, the board of directors examined and approved a motion to adjust the price ceiling of the repurchase shares, raising the maximum purchase price from 6.58 yuan per share to 9.76 yuan per share, and 377 million of the repurchase amount has been paid as of July 31, 2010. the continuous buyback demonstrates the company's management's confidence in the transformation and development.
Investment suggestion: the revenue in the first half of the year increased steadily with the carry-over of real estate projects, and the net profit of home ownership decreased significantly in the current period compared with the same period last year due to the large non-recurrent income generated by the disposal of equity interests in the joint venture company in the same period last year. The value of the completed real estate project of the company is abundant, and it is expected that it will continue to release profits in the future; the rental income of holding properties will grow steadily; the structure of assets and liabilities will continue to be optimized, with sufficient cash on hand; at the same time, the company will continue to buy back shares, demonstrating confidence in future transformation. It is estimated that the EPS of the company from 2020 to 2022 is 0.35,0.38,0.42 yuan respectively, and the current stock price corresponds to the PE of 24.83X, 22.39X and 20.36X respectively from 2020 to 2022, maintaining the "buy" rating.
Risk hint: the company's business transformation is not as expected, and the company's real estate project sales and settlement are lower than expected.
