Event: the company announced 18 annual report and 19 quarterly report. Revenue in 18 was 14 billion yuan, up 88.16% over the same period last year. Net profit from home was 1.186 billion yuan, up 39.97%. Net profit from non-parent was 969 million yuan, up 205.89% from 0.63 yuan per share and 0.20 yuan per share (including tax). Revenue in the first quarter of 19 was 897 million yuan, down 14.08% from the same period last year. The net profit returned to the mother was 7.84 million yuan, down 79.92% from the same period last year.

Comments:

A big increase in real estate settlement and an increase in gross profit margin, and good cost control led to a big increase in performance. During the reporting period, the company signed a sales area of 880400 square meters (- 0.03%), the sales amount was 10.702 billion yuan (+ 3.56%), the settlement area was 1.0436 million square meters (+ 38.26%), and the settlement amount was 11.354 billion yuan (+ 84.86%). With the help of the official opening of the Tongguanyao Ancient Town Scenic spot in New Hualian, the company's sales in Changsha area have increased greatly. The company's real estate projects are mainly distributed in urban clusters and economically developed areas such as "Beijing-Tianjin-Hebei", "Yangtze River Delta" and "Daya Bay". And the company has been ploughing there for many years, has a good land cost advantage, and the existing land reserve is relatively abundant. Can fully support the sustainable development of the company in the future. The settlement of high-quality real estate projects led to a significant increase in gross profit margin (1.7pct). Among them, commercial housing sales increased 3.97pct, other businesses (mainly cultural and tourism projects) decreased 7pct due to the new operation of Tongguan kiln project, and revenue growth led to a decline in expense rate (5.42pct). Among them, management expense rate and financial expense rate decreased by 3pct and 2.61pct respectively. The decline in revenue in the first quarter of 2019 superimposed the off-season of cultural and tourism projects, resulting in a greater decline in profits, which was subsidized by the Tongguanyao government to make the net profit positive.

The layout of the cultural brigade is the next city, and the Jeju Island project has been approved for development. 18 years is an important year of promotion since the transformation of the company. the first cultural and tourism project, Wuhu Jiuzi Ancient Town, after the full opening of the east coast, the Ocean Show was officially opened during the reporting period, and the west bank of Jiuzi Ancient Town has been fully completed. Tongguanyao Ancient Town Scenic area opened grandly in August 18 and achieved good operating results; successfully acquired Langzhong Ancient City Scenic area in Sichuan and carried out cooperative operation. Wuhu Jiuzi Ancient Town and Xining Children's Dream Park have made every effort to speed up construction to ensure their opening in 2019; at the same time, they have acquired China Shipping Culture Travel Design and Research (Dalian) Co., Ltd. and Hunan overseas Travel Co., Ltd., so that the company's business to the planning and design and tourism service company's cultural travel territory continues to grow, and the cultural travel business performance is gradually released. A breakthrough has been made in overseas projects, and in March 19, it obtained the development license for the project of Xinhua Union Fairview Villa Tourism Park, a special autonomous road in Jeju. The company has made continuous breakthroughs in the active layout of the culture and tourism industry, and the synergy effect of "literature and tourism + real estate" has been confirmed in the Tongguan kiln project. with the continuous enrichment of the development and operation experience of the culture and tourism project, the existing projects are gradually mature and can grow up.

Changsha Bank has completed its listing and continued to contribute sound investment income. Changsha Bank, which holds 8.46% of the company's shares, has been listed (the market value of the shares is 3.05 billion yuan at today's closing price), with revenue of 13.9 billion yuan / + 14.95% and net profit of 4.479 billion yuan / + 13.94% in 18 years, continuing to contribute sound investment income to the company. in addition, the Asia-Pacific Reinsurance Company, which participated in the establishment of the Asia-Pacific Reinsurance Company, is awaiting the approval of the Insurance Regulatory Commission, and the diversified financial business is in line with the company's strategic transformation plan.

Profit forecast and investment rating: the company's transformation strategy has gone further in 18 years. Tongguanyao ancient town has officially opened, the supporting real estate business has been well removed, the ancient town has received an average of more than 100000 people a month, and important gains have been made in financial layout. Changsha Bank has completed its listing, and South Korean project development has been approved, and the follow-up progress is worth looking forward to. The real estate business continues to transform and upgrade, the gross profit margin continues to improve, and the layout of the travel industry chain continues to improve, which has become another driving force for the company's growth. It is estimated that the 19-21 EPS0.60/0.74/0.88 yuan, April 25 closing price corresponding to PE is 8-6-5 times, maintaining the "prudent overweight" rating.

Risk hints: the fixed increase project does not proceed smoothly, the housing market policy is further tightened, the effect of resource integration is not as expected, the operation of the culture and tourism project is not as expected, the progress of overseas projects is not as expected, the risk of exchange rate fluctuations, goodwill impairment risk.