Acquisition of Shenzhen Yunfang (QFang.com), layout of O2O real estate intermediary business. The company acquired Shenzhen Yunfang in 2017, Q Room is an O2O model as the core real estate intermediary service provider, with "Internet +" as the leading, mainly engaged in new housing agents, second-hand housing brokerage business. According to the latest data of QFang.com, thousands of stores have been set up in 23 cities across the country, with more than 20,000 brokerage partners, with a leading market share in Shenzhen, Zhuhai, Zhongshan and other areas. at the same time, it is also actively laid out in Shanghai, Qingdao and other cities, expanding steadily, and initially forming a multi-regional and multi-city offline business system across the country.
With the advantages of O2O channels, new second-hand housing linkage, independent brokers and other systems, Q Room has gained a leading advantage in the industry:
Relying on the channel advantage of O2O, the linkage of new houses and the independent broker system, the company has gained a leading advantage over its competitors in the industry: 1) the agency rates and brokerage commission rates for new houses are higher than those of the World Union Bank, which is higher than those of the same industry. I love my family. The agency rates for new houses in 15-17 years are 2.33%, 2.5% and 2% respectively. In 15 and 16 years, the company's brokerage commission rates were 1.64% and 1.62% respectively, which were close to those of my love family, but rose to 1.91% in 17 years, exceeding the 1.68% I love my family. 2) Independent broker system stimulates employees' enthusiasm: Shenzhen Yunfang and brokers adopt cooperation mode rather than employment mode, and encourage brokers by increasing commission commission ratio, and the per capita income increases significantly.
Under this incentive policy, the per capita monthly income of Yunfang in Shenzhen is expected to continue to grow in 17 and 18 years.
Q Fang stores are expanding against the trend, the market share continues to rise, and the proportion of first-tier stores is as high as 58%. It is expected to benefit from the first-line recovery: the company has a total of 1073 stores in 2016. we estimate that the company will have about 1300 stores by the end of 2018, of which first-tier cities account for about 58%. If only considering the market share of second-hand housing companies in 2017, it lags behind the Central Plains and Lianjia. But if you add in the sales of the new home business, it is expected to surpass the above two in first place. At the same time, after nearly two years of adjustment in first-tier cities, the volume of second-hand housing transactions has bottomed out and rebounded, and we expect to see a rise in volume and prices in 2019, and the company will meet the possibility of sales exceeding expectations by virtue of its ultra-high share and counter-trend expansion.
The increase of shareholders' holdings shows confidence and the focus of lifting the ban is in October 2020: when the company buys Q houses, the price is 8.49 yuan, and about 400 million shares accounting for 46.93% of the total share capital will be lifted on October 23, 2020. The previous supporting financing part has been lifted in November 2018. By the end of February 2018, the announcement has completed most of the reduction, and a small amount of reduction.
In addition, the notice of Guochuang Group, the shareholder of the company, is based on the confidence in the future development prospects of the company and the recognition of the value of the company, so as to promote the sustained, stable and healthy development of the company and safeguard the interests of the shareholders of the company. It plans to increase its shares in the company through secondary market bidding within 6 months from February 13, 2018; on August 11, 2018, the company announced that it had completed the increase of 6.48 million shares, with an average price of 7.43, at a total cost of 50.13 million yuan.
Investment advice: Shenzhen Yunfang (QFang.com), acquired by the company, is a leading O2O real estate agency, with more than 1,000 stores in 23 cities across the country, of which nearly 60% are in first-tier cities. With channel advantages and independent broker incentive system, agency rates and market share have continued to rise in recent years, and have become a leading enterprise in Shenzhen and Dawan area. Benefiting from the recovery of the real estate market in first-and second-tier cities in 19 years, the real estate trading market is expected to achieve a simultaneous rise in volume and prices, while the layout of cloud houses in heavy warehouses in first-tier cities is expected to benefit obviously, and the upgraded big data platform will be put into operation in 19 years, which will further help guide and transform customers and improve sales efficiency. Based on the above, we estimate that the 18-20 year net profit of the company is 312 million, 415 million and 544 million respectively, the corresponding EPS is 0.34,0.45,0.59 yuan respectively, and the corresponding PE is 20.34X, 15.30X and 11.67X respectively. With reference to the valuation of my family, we give the company a 22.4 times valuation target in 2019, corresponding to the target price of 10.08 yuan, covering for the first time and giving a "buy" rating.
Risk tips: performance commitments are not fulfilled as expected, goodwill impairment risk, commission rate decline risk, asset valuation appreciation risk is too high.