Net profit increased by 18.9% in 2009, in line with market expectations. The company released its annual report today: operating income is 1.01 billion yuan, up 12.4% over the same period last year; operating profit is 320 million yuan, up 25.3% over the same period last year; net profit belonging to the parent company is 240 million yuan, up 18.9% over the same period last year; and basic earnings per share is 0.31 yuan, which is in line with market expectations. The company does not distribute profits in 2009.
Layout of Shandong key cities of the complex developers. The company completed its asset restructuring at the end of 2008, and major shareholders and their related parties injected into the high-quality real estate business.
The company's project reserve planning construction area is about 4 million square meters, and there are three main projects, all of which are large-scale urban complexes of more than 1 million square meters, namely, Jinan Zhongrun Century City, Weihai Korea window, Zibo Zhongrun overseas Chinese Town.
The wholly-owned subsidiary of the company set up Qingdao Company in March 2009, preparing to enter Qingdao area and further optimize the layout of the project.
Jinan Zhongrun Century City is still the main source of performance in 2009. The company's settlement income and rental income in 2009 were 9.8 yuan and 20 million yuan respectively, an increase of 11% and 236% over the same period last year. Based on the average settlement price of 4200 yuan per square meter, the company achieved a settlement area of 235,000 square meters in 2009. The company's three major projects in Jinan, Weihai and Zibo are in the rolling development stage, and the income from the above three projects in 2009 is 6.7,1.3 and 220 million yuan respectively. Jinan Zhongrun Century City is still the main source of the company's performance in 2009.
The degree of performance lock-in was low in 2010. The projects that the company participated in the settlement in 2010 are mainly completed and some projects under construction, as well as part of the area of Weihai Korea window Phase III (one of the non-public additional investment projects in 2009).
By the end of 2009, the company received a balance of 730 million yuan in advance, covering only 52% of our estimated 2010 settlement income (1.4 billion yuan).
The performance may grow rapidly in 2011. The company's non-public additional investment projects in 2009 will focus on entering the settlement cycle in 2011. The company is relatively rich in settlement resources and has a high performance growth rate in 2011.
Strong profitability. The company's strong profitability (gross profit margin more than 45%) mainly comes from the lower land cost, which is related to the earlier acquisition of land and the super-market model of the complex. Take the company's private placement plan for investment projects in 2009 as an example: the floor prices of Jinan Zhongrun Century City Phase 3, Zibo Zhongrun overseas Chinese Town Phase 5 and Weihai Korea window Phase 3 are 1505, 259 and 144RMB / sqm, respectively. The average sales price of these projects is expected to be 9500, 5000 and 3000 yuan per square meter, respectively, and the ratio of land price to house price is 16%, 5% and 5% respectively, which are significantly lower than the industry average of about 25%.
The fund increased its position in the fourth quarter. According to the company's three quarterly reports, only Haifu Tong appears among the top 10 current shareholders, holding 1.77 million shares of the company, while the company's annual report shows that among the top 10 current shareholders are Cathay Pacific (4.03 million shares), Xinhua (2.92 million shares) and Hai Fu Tong (2.7 million shares). The fund significantly increased its positions in the fourth quarter, and it is estimated that it is mainly optimistic about the company's project layout, business model, and strong profitability.
The financial risk is greater. The company's asset-liability ratio at the end of the reporting period is 80.21%, and the real asset-liability ratio excluding prepaid payments is 59.5%, which is at a high level in the industry, and the long-term financial structure needs to be improved. Excluding the accounts received in advance, the real quick ratio is 0.3, the short-term debt repayment pressure is greater, and the inventory accounts for the vast majority of the company's current assets. The company reported book cash of 300 million yuan at the end of the period, an increase of 240 million yuan over the beginning of the period, mainly due to operating cash flow (110 million yuan) and fund-raising cash flow (150 million yuan). In July 2009, the company issued a non-public additional offering plan, with a price of not less than 7.47 yuan per share and no more than 130 million shares, and the net funds raised did not exceed 970 million yuan. If the additional offering is successful, the company's financial situation will be improved.
The company is about to take off its hat. As the net profit in 2009 and net profit after deducting non-recurring profit and loss were 2.40 yuan and 230 million yuan respectively, the company submitted an application for "capping" to Shenzhen Stock Exchange on March 22, 2010.
Profit forecast and investment rating. We expect the company's earnings per share from 2010 to 2011 to be 0.47 yuan and 0.82 yuan respectively. Based on yesterday's closing price of 9.01 yuan, the corresponding dynamic price-to-earnings ratio is 19 times and 11 times respectively, and the valuation is more reasonable. taking into account the company's layout in Shandong key cities, complex super-market model, strong profitability and good growth, we maintain the company's "overweight" rating.