Main points of investment:
The three core businesses are based on construction engineering.
The company is mainly engaged in construction, real estate development, housing industrialization (a hundred years of low-carbon industrial housing research and manufacturing) three major business. Among them, construction projects account for 75-80% of the turnover. As one of the first 43 super-qualified enterprises for general contracting of housing construction in the country, the business covers a wide range of businesses and comprehensive regional layouts, including government and public buildings, municipal and infrastructure construction, commercial and residential buildings, and industrial factories. In the regional layout, it has covered more than 20 provinces and cities around the Bohai Sea, the Yangtze River Delta, the Pearl River Delta and the central region, with an annual construction capacity of more than 10 million square meters.
The land reserve is abundant and the average land cost is low
By the end of 2012, the total construction area of the company's land reserve was about 2.7 million square meters, of which the equity construction area was 1.5 million square meters, mainly distributed in Shaoxing, Hefei, Shanghai, Wuhan and Kaifeng.
Sales in January 2013 were about 190 million yuan, and sales in the fourth quarter of last year maintained a good momentum. The 13-year sales target is 2.5 billion yuan, of which the volume of goods available for sale is 50-5.5 billion yuan. Judging from the current number of real estate sales, Shaoxing and Hefei each have three buildings, with the largest volume. Among them, Baoye four Seasons Garden, Urban Green Garden Phase 4, Baoye Guanggu Lido and Shanghai Pudong Project will contribute great achievements in 13 and 14 years, and are expected to achieve significant growth.
Stable gross profit margin and healthy financial position
The gross profit margin of the three major businesses: the gross profit margin of the construction business remains stable, with the construction guidance price, and the gross profit margin is about 3.2% to 3.3%; the development of the building materials industry is stable, and the company's business gross profit margin remains at 4-5%; although the gross profit margin of real estate development has declined significantly in 11 years, it is expected to return to the range of 35-40% in the future. The company's financial situation is very satisfactory, continue to maintain a net cash status, with sufficient financial strength to expand the business.
Its financing cost is 5.6%, mainly six months of short-term borrowing. The company's 10-year net cash rate is as high as 39%, and the company will maintain a net cash rate of 13% and 24% in 13 and 14 years in the future.
Growth is expected to accelerate in the future, with a target price of HK $8.83:
We estimate the company's net asset value at HK $17.66 per share. at present, the average discount rate in the industry is 40-50%, giving the company a NAV discount rate of 50%. The company's target price for the next 12 months is HK $8.83. the 13-and 14-year earnings per share of the company are 1.526 and 2.088 times, respectively. The target price is 56% higher than the current price of HK $5.66 and is given a buy rating.
