Event

According to the annual performance forecast issued by the World Bank in 2020, the company achieved a net profit of 0.98-123 million yuan, an increase of 20% and 50% over the same period last year.

Core viewpoints

The disposal of equity and government subsidies hedged the impact of the epidemic, and the performance growth was in line with expectations. The company issued an annual performance forecast for 2020, showing a net profit of 0.98 billion yuan to 123 million yuan, an increase of 20% to 50% over the same period last year. The company's performance achieved positive growth, mainly due to gains from the disposal of part of the equity investment and government subsidies. It is estimated that the impact of non-recurrent profit and loss on net profit is about 96 million yuan, and the net profit after deducting non-recurrent profit and loss is 202.78 million yuan. 94.6% lower than the same period last year. Under the impact of the epidemic, some of the company's main businesses were affected, resulting in a decline in profits within expectations.

The trading business has improved steadily, while the apartment and financial businesses have declined. In order to cope with the impact of the epidemic, the company actively promoted online housing and wisdom cases, arranged to expand the development of distribution and direct selling business, ensuring that the trading business income remained stable and achieved year-on-year growth. Affected by the epidemic, the operation of the apartment business is not as expected, the rental cost of the charter model continues to be affected by the straight-line amortization of rental accounting standards, and the operation continues to lose money. The company takes the initiative to shrink its financial business, focus on the trading scene, and strictly control the risk, which leads to a decline in revenue and has a certain impact on net profit.

Actively introduce state-owned assets, take the initiative to focus on strategy, and peel off assets to move forward light. The company introduced Dahengqin Group, took the initiative to focus on strategy, and formulated the "Big deal + Big Capital Management".

The development strategy of two-wheel drive. Dahengqin gives strong support to the company in property management resources and remote project development. At the same time, the company transfers some loan assets from the financial sector, sells the charter model part of the long-term rental apartment business, and retains the housing source of self-ownership and light asset model to achieve light travel. We believe that in the future, the company will accelerate on the strategic track of "big deal + big asset management", and the improvement of management will also be realized in terms of performance.

Maintain the buy rating. We predict that the EPS of the company from 2020 to 2022 will be 0.05, 0.17, 0.20 yuan.

Risk hint: the decline of trading services is higher than expected; the development of property management is lower than expected.