Event
According to the 2019 semi-annual report issued by Jindi Merchants, the company achieved operating income of 3.062 billion yuan in the first half of 2019, an increase of 77% over the same period last year; net profit of 1.158 billion yuan, an increase of 93% over the same period last year; and basic earnings per share of 0.0729 yuan.
Comment
The performance exceeded expectations and released. In the first half of 2019, the company achieved operating income of 3.062 billion yuan, an increase of 77% over the same period last year, and a net profit of 1.158 billion yuan, an increase of 93% over the same period last year. The improvement in performance was mainly due to settlement volume, while the gross profit margin was as high as 45%, and profitability remained high. The company's sales are growing rapidly. In the first half of 2019, the company achieved sales of 26.168 billion yuan, an increase of 64% over the same period last year, and a sales area of 1.2403 million square meters, an increase of 68% over the same period last year. The company's sales resources from 2017 to 2018 lay a solid foundation for future performance settlement.
With the active acquisition of land, the scale of land reserve has increased steadily. By the first half of 2019, the company's land reserve was 1541 million square meters, up 15% from the same period last year. In terms of cities, 25% are located in first-tier cities, 65% in second-tier cities such as Nanjing, Qingdao, Hangzhou, Wuhan, Xi'an and Tianjin, and 10% in third-tier cities such as Huaian, Xuzhou and Taicang. In the first half of 2019, the company added 13 new projects, with a total construction area of 2.45 million square meters, an increase of 170% over the same period last year, and the proportion of area equity was 53%. The total land price was 25.22 billion yuan, an increase of 163% over the same period last year, and the proportion of caliber equity was 55%. The average price of land was 9930 yuan per square meter, down 3% from the same period last year.
The rental income of holding property increased significantly compared with the same period last year. In the first half of 2019, the company realized rental and management fee income of 280 million yuan, an increase of 28% over the same period last year. The company is currently operating Shenzhen Weixin Science and Technology Park Phase I and II occupancy rate of 97%, Beijing Sohu.com Ltd Network Building, Shanghai No. 8 Bridge project rental rate of 100%, while Hangzhou Shopping Center rental rate of nearly 100%. The projects currently under development by the company include commercial complex projects in Xuzhou, Nanjing, Jinan, Huai'an, Beijing and Shanghai, as well as the third phase of Weixin Science and Technology Park in Shenzhen. It is expected that after the completion of all commercial projects, it is expected to bring 1.5 billion yuan of incremental space for the company's rental and management fee income.
Investment suggestion: Jindi merchants look forward to buying and taking land, focusing on the layout of the core first-and second-tier cities, with abundant land reserves and low costs. at present, the scale of land reserves exceeds 1500 million square meters. At the same time, the company also holds a large number of high-quality properties in the core cities, as well as a large number of properties under construction, and rental income will continue to rise in the future. It is estimated that from 2019 to 2021, the company's EPS will be 0.20,0.27,0.31 yuan respectively, and the corresponding PE will be 4.01,2.96,2.61 times respectively, maintaining a "buy" rating.
Risk hints: industry sales fluctuations; policy adjustments lead to operational risks (shed reform, regulation, tax policy, etc.); changes in financing environment (mortgage, development loan, interest rate adjustment, etc.); enterprise operational risks (personnel change, construction, land acquisition, etc.); exchange rate fluctuation risk.