Performance review

In 2015, the company realized operating income of 1.881 billion yuan, an increase of 6.86% over the same period last year; the net profit attributable to shareholders of listed companies was 91.5196 million yuan, down 46.99% from the same period last year; the net profit belonging to listed companies after deducting non-recurrent gains and losses was 91.7745 million yuan, down 46.29% from the same period last year; net cash flow from operating activities was 484 million yuan, an increase of 201.43% over the same period last year Basic earnings per share was 0.29 yuan per share, down 46.30% from the same period last year, and the weighted average return on equity was 6.02%, 6.18 percentage points lower than that in 14 years.

Performance evaluation

The profit level of the point project is low, and the efficiency of internal control needs to be improved. Most of the company's current projects are located in Hefei and Bengbu, Anhui Province. during the reporting period, real estate sales achieved a total operating income of 1.826 billion yuan, an increase of 3.88% over the same period last year, and a gross profit of 459 million yuan, a decrease of 8.57% over the same period last year. Gross profit decreased 3.42 percentage points to 25.12% over the previous year. The main reason is that the Hefei amber Fifth Ring City project, which accounts for 51.50% of revenue, was carried forward during the reporting period, 21.79% of gross profit pulled down the overall level, and the gross margin of other projects ranged from 20.72% to 35.37%, which is at the medium-low level of the industry. The overall performance of the real estate market in Anhui Province in 2015 was poor. The sales area of commercial housing for the whole year was 61.741 million square meters, down 0.5% from the same period last year. The sales volume was 336.94 billion yuan, a slight increase of 0.7% over the same period last year, much lower than the national average growth rate of 6.5% and 16.6%. The company's main business is obviously affected by the regional market, the demand is weak, and the pricing space continues to be squeezed. In addition, the company's expense rate during the sales period increased by 2.67 percentage points over the previous year to 9.54%, further lowering the overall profit level, and the internal control efficiency and management level need to be improved.

At the end of the reporting period, the company received 2.208 billion yuan in advance, an increase of 33.36% over the same period last year. Cash received from selling goods and providing services was 2.381 billion yuan, an increase of 39.61% over the same period last year, both of which were 3.88% higher than the current revenue growth rate. The pulling effect of the carry-over lag on short-term revenue will appear in the next one to two years. The ending inventory is 5.479 billion yuan, an increase of 24.90% over the same period last year. The total remaining salable resources of the push plate project in 2015 is 221800 square meters. It is difficult to achieve a substantial adjustment in the product structure in the short term, and the profitability level will depend on the price elasticity of the regional market and the improvement of the company's internal control efficiency.

The relay in the core second-and third-tier cities is heating up, and the unfavorable situation in key business areas has been reversed. The rapidly rising investment and home ownership threshold of first-tier cities gradually tilted the market focus to key second-and third-tier cities, entering a double easing cycle of monetary and industrial policies, and rigid demand and improved demand were reasonably released. at the same time, the investment value of real estate as a hard asset reappeared, and key second-and third-tier cities showed a rapid recovery at the beginning of 2016 under the demand spillover and transmission effect. According to our weekly data monitoring, since the beginning of 2016, the transaction scale of new commercial housing in key second-and third-tier cities has increased by 0.86% and-10.26% respectively compared with the average level of last year, slightly better than the level of-14.45% in first-tier cities. Market hot spots began to spread to the periphery of regional central cities.

The market expectation of Hefei, the company's key business area, has also undergone positive changes. in 2015, the transaction area of urban land in Hefei reached a four-year low, a decrease of 12.95% compared with the same period last year, but the transaction volume reached a five-year high, with an increase of 35.72% over the same period last year. The average land price rose 55.91% to 6.7425 million yuan per mu, with a total premium rate of more than 100% on 17 plots, accounting for 1/3 of the total transaction area in the urban area. In 2015, four brand housing companies newly entered the Hefei market, and at least 12 brand developers made it clear that they would enter the market. As the capital city of Anhui Province and one of the core cities of Wanjiang city belt, Hefei has great regional development potential, developers are optimistic about the rebound of undervalued value, and the company's current project layout is here. Four new plots in the east of Hefei during the reporting period are expected to continue to benefit from the rise in the regional market and achieve a reversal of performance through priority layout.

The equity transfer was completed, and the large financial control platform opened up a new situation in the reform of state-owned enterprises. The company announcement on March 6, 2015 disclosed the "suggestive announcement on the free transfer of state-owned shares". According to the overall arrangement of the reform of state-owned state-owned enterprises in Hefei, it is proposed to transfer 57.89% of the company's state-owned shares held by Hefei State Control to Hefei Xingtai Holdings Group Co., Ltd., and the registration procedures for equity transfer on March 21, 2016 have been completed. Taking into account the 0.01% stake increased by Xingtai Holdings through the secondary market on January 16, 2016, the current shareholding ratio has reached 57.90%, and the company's largest shareholder has been changed from Hefei Holdings to Xingtai Holdings, becoming the only listed platform company under Xingtai. The actual controller has not changed and is still Hefei State-owned assets Supervision and Administration Commission.

Xingtai Holdings is a large financial control platform company under Hefei SASAC, which undertakes the important task of establishing and improving the local financial service system in Hefei. The scope of business covers banking, securities, insurance, credit guarantee, asset management, equity trading, trust, fund, financial leasing, pawn, venture capital fund, venture capital and other financial fields. By the end of the third quarter of 2015, Xingtai Holdings had assets of 18.683 billion yuan, revenue of 637 million yuan and net profit of 413 million yuan. After joining the urban construction of Hefei, Xingtai Holdings will provide all-round financial support for the company's real estate development, further invigorate high-quality project resources, and actively improve the financial structure and internal control level. At the same time, with the promotion of the reform of local state-owned enterprises, the company, as the only listed platform under Jintai Holdings, is expected to increase its future asset injection and integration, and the value of the company's platform is facing revaluation.

Overall, the company has sufficient project reserves, concentrated in key urban areas in Anhui Province, and has a relatively strong ability to transform performance in the future. with the company facing a series of business adjustments and asset restructuring after the change of ownership, the future development is expected to be stable and good.

Risk hint

The risk of Anhui regional market increases; there is uncertainty in the follow-up asset integration.