The company has become one of the three major real estate platforms of China Communications Group: on July 8, the 100% stake in China Housing Real Estate Development Co., Ltd. held by China Housing Group was transferred to China Communications Group Co., Ltd., so far, the shares of the three major real estate platforms are all in the name of China Communications Group: 1) China Real Estate is the listed real estate platform of China Communications Group in China: after the completion of the equity transfer, the company has become the only real estate platform listed in A shares of the group. The value of future integration is highlighted. 2) Zhongjiao Real Estate is the main unlisted real estate platform of China Communications Group: Zhongjiao Real Estate has always been the unlisted real estate platform of the company, undertaking the task of real estate construction at home and abroad, is an important part of China Communications Group; 3) Greentown Real Estate is the overseas listing platform of China Communications Group: Zhongjiao Group has successively acquired nearly 29% of Greentown Real Estate as its largest shareholder. Greentown's excellent real estate development experience will help the group.
Establishment or accelerated integration of Zhongjiao Real Estate Group: Zhongjiao Real Estate Group was formally established on July 28. The professional Huazi Group, initiated by Zhongjiao Real Estate Group and established through the integration of enterprises belonging to the real estate sector, will give full play to its overall advantages in the future. further do a good job in the management and support of Greentown, and further speed up the business integration of Zhongjiao Real Estate and China Real Estate. Speed up the construction of overseas real estate platforms, which may be the beginning of platform integration.
The company's real estate business is relatively sound, the land reserve is 3.16 million square meters: the company's overall operation is sound: 1) the project reserve is relatively safe: the company's current land reserve area is 3.16 million square meters, mainly concentrated in the core second-tier cities, relatively safe; 2) the asset-liability structure is relatively healthy: although the company's asset-liability ratio has increased, the overall liability is only 57%, which is far lower than the industry average. 3) the company has a small number of projects and increased performance volatility: at present, the company's main settlement projects mainly come from Zhongfang Ruizhi, with a relatively high proportion of single projects, which increases the performance volatility.
Investment advice: the company's real estate business develops steadily and its asset-liability ratio is low, but it is restricted by its small scale, high project concentration and increased performance fluctuations. With the establishment of Zhongjiao Real Estate Group, the coordinated integration of Zhongjiao Real Estate, Zhongjiao Real Estate and Greentown Real Estate may accelerate. We estimate that the company's EPS for 2015-2017 will be 0.31,0.36 and 0.42 yuan, and the corresponding stock prices will be 51x, 45x and 39x. For the first time, it was given a "overweight-A" rating, with a 6-month target price of 20.39 yuan.
Risk hint: at present, with the rising expectations of state-owned enterprise reform, a large part of the company's share price comes from reform premium, the main risks are: 1) failure of state-owned enterprise reform expectations; 2) platform integration is lower than expected; 3) difficulties in real estate sales.