Core viewpoints
The company's performance continues to grow, and the high growth of advance payments supports future performance. For the whole year, the company achieved an operating income of 1.18 billion yuan, an increase of 19.1% over the same period last year, and a net profit of 150 million yuan, an increase of 16.6% over the same period last year. Due to the hot sales of the Xiangteng Luyuan residential project, the company received 1.07 billion yuan in advance in 2016, an increase of 5842.6% over the same period last year. The gradual settlement of the payment will lock in the performance of 1718 years, and the company's operating income is expected to increase significantly in the next two years. In addition, the overall average financing cost of the company fell to 4.6% from 5.0% in 2015, and the asset-liability ratio dropped to 54.5%. The overall financial position is relatively sound.
The operation mode has changed to leasing and selling at the same time, and the leasing revenue has increased rapidly. The company's sales business grew steadily in 2016, with sales revenue of 880 million yuan for the whole year, an increase of 13.5% over the previous year. The leasing income of the leasing business for the whole year reached 210 million yuan, an increase of 35.0 percent over the previous year, and the growth rate was significantly higher than that of the sales business. The overall rental and sales work of the company shows a good trend of steady improvement and sustainable development.
Actively give full play to the advantages of Ju Neng Wan incubator and participate in equity investment through multiple channels. In 2016, the company's incubator Ju Neng Wan Company was awarded the third batch of national business incubation demonstration bases of the Ministry of Insurance. As of December 31, 2016, Ju Neng Wan Company had accumulated 162 incubation nursery projects, 218 incubators and 38 accelerator enterprises. In addition, the company established Shanghai Yueran Investment Management Co., Ltd. in a joint venture with Tide Group, and then participated in Shanghai Volcano's first phase equity investment partnership (limited partnership). On March 18, the company announced that it would participate in subscribing for the non-public offering shares of Huajian Group with its own funds. the trend of diversification of equity investment channels has been further continued.
Financial forecasts and investment suggestions
Maintain the "overweight" rating, and the target price is slightly lowered to 21.08 yuan (the original target price is 21.39 yuan). We predict that the EPS of the company from 2017 to 2019 will be 0.31-0.41-0.49 yuan. Using the comparable Company Law, we give the company a valuation of 68X in 2017, corresponding to the target price of 21.08 yuan. The company will settle residential projects in 2017, and the results will be centrally released, so we maintain our "overweight" rating.
Risk hint
The project sales or rental rate of the company is lower than expected.
The return on investment in start-ups is lower than expected.