Event: the company released the mid-2020 report that the company achieved 561 million yuan in revenue in the first half of the year, an increase of 21.78 percent over the same period last year, and realized deduction of 6.6727 million yuan in non-return net profit, an increase of 103.76 percent over the same period last year.
Comments: the net profit of deducting non-return is high, and the operating cash flow is improved. During the period, the company's parent net profit decreased compared with the same period last year, but the high non-return net profit was due to the investment income of 394 million yuan generated by the disposal of equity in the joint venture in the same period last year, but no such event occurred in the current period. In addition, due to the company's continued strategic transformation and the contraction of the real estate business, taxes and fees such as project payments and land tax increases decreased compared with the same period last year, and the company's operating cash flow improved significantly, with an increase of 118.92% during the period.
Strengthen strategic transformation and upgrading, integrate resources and empower development. During the period, the company's management team established the overall development strategy of "new Wantong, new empowerment and new development", upgrading "production-city integration" with the original real estate business as the core carrier, and enabling "new infrastructure" with digital science and technology. actively develop the diversified ecological model of real estate + N. In terms of real estate business, the company achieved a sales area of 15700 square meters, + 38.9% year-on-year, sales of 341 million yuan, + 11.1%. There was no new land reserve during the period. In terms of investment property, the office rental rate affected by the epidemic has declined. In terms of real estate finance, during the period, the subsidiary Rongguofu realized revenue of 354.841 billion yuan and net profit of 17.187 million yuan. In order to demonstrate the determination of transformation, the company started the review process of name change during the period, and the abbreviation of the company's securities was changed to "Wantong Development" since August. Following the national strategy, the company actively laid out IDC, big data, cloud computing and other important "new infrastructure" related industries, during which the company signed an "Investment Cooperation Memorandum" with Fujian Digital Fujian Cloud Computing Operation Co., Ltd. to increase capital and the target company is engaged in the construction and operation of big data Center. In addition, during the period, the company elected Mr. CEO Mei Zhiming of GLP to join the company's board of directors as a non-independent director and served as chairman of the Strategy Committee.
The company buys back a lot of money, which shows its confidence in development. Based on the confidence in the company's future development prospects, the company announced in December last year that it planned to buy back the company's shares by centralized bidding, with a total amount of no less than 250 million yuan and no more than 500 million yuan. As of July 31, the company has bought back 377 million yuan.
To maintain the company's buy rating, the company's EPS is expected to be 0.35,0.40 and 0.45 yuan in 2020, 2021 and 2022, and the corresponding PE is 24.69,21.30 and 19.01 times, respectively.
Risk hints: regulation and control policies tighten more than expected; repeated outbreaks bring uncertain effects
