Core viewpoints
Fuxing shares: the old benchmark Luozi Yangtze River New City
Fuxing, an old benchmarking enterprise in Hubei Province, announced in November that it had participated in the urban village renovation project in Zhongnan Lake Village, Huangpi District, the new city of the Yangtze River, covering a land area of about 3000 mu. According to the company's estimate, the floor cost per unit area of the Nanhu village renovation project is no more than 2500 yuan / square meter, the average sales price of the residential project on the other side of the river is 12000 yuan / square meter, and the gross profit margin of the Jianan cost company is also more than 40%. It is obviously higher than the profit level of land acquired by bidding. At the same time, the company is also paying close attention to the follow-up "village in the city" renovation project of the Yangtze River New City.
Focus on real estate performance is expected to exceed expectations
In October 2016, the company changed its business scope to further accelerate its move away from its old low-margin metals business and focus on real estate. In 2017, the company's goods value is relatively abundant, it has opened many markets in Wuhan, and has a stable sales base, and the company's project has basically covered key areas in Wuhan, and the profit margin of the project can be maintained at about 30%. As the settlement share increases, it will boost the overall profit level of the real estate business, and the annual performance is expected to exceed the sales performance in 2016.
Seek new and change and go out of Hubei
2017 is an important year for the company's nationalization strategy. At present, it has cut into the central economic zone (Wuhan, Yueyang), Beijing-Tianjin-Hebei (Tongzhou, Beijing), Chengdu-Chongqing Economic Zone (Chengdu), Pearl River Delta Economic Zone (Shenzhen), Bohai Economic Zone (Chifeng) and other major urban areas. The land reserve will be increased by 2.8452 million square meters in 2017, and the company's existing land reserve can meet the development needs of the company in the next 4-5 years. The company is tracking plots in Wuhan, Chengdu, Shenzhen and Guangzhou, with a total land area of 26.26 million square meters. In addition, at the end of August, the company revised the equity incentive plan, the exercise conditions require the company's net profit to continue to grow substantially in the next three years, better bind the interests of management and shareholders, and the future development can be expected.
For the first time, coverage will be rated as "overweight".
For the first time, coverage gives an "overweight" rating. In the first three quarters of 2017, the company realized a net profit of 820 million yuan belonging to shareholders of listed companies, an increase of 22.70 percent over the same period last year, corresponding to basic earnings per share of 0.86 yuan. We estimate that the company's main business income from 2017 to 2019 is 112.47 yuan, 146.71 yuan and 18.954 billion yuan respectively, the net profit is expected to reach 10.15,12.77 and 1.718 billion yuan, the EPS is 1.07,1.34,1.81 yuan per share, respectively, and the corresponding PE is 11.45,9.10,6.76 times. The company's performance is stable, locking in high performance growth in the next few years, and has more room to rise.
Risk hints: the expansion of foreign projects in Hubei Province is not as expected; the promotion of urban village projects is blocked, etc.