Huaxia Happiness (600340): Rebirth in 2018, looking forward to the coordinated development of peace and happiness
Investment Highlights: Performance growth is in line with expectations.
In 2018, the company realized operating income of 83.8 billion yuan (41%), and its net profit attributable to its parent was 11.7 billion 北京spa会所 yuan (33%).
The performance in 2018 reached the standard for gambling, that is, the net profit attributable to the mother was 114 in 2018-20.
The rate of change in the company’s profit structure, with a gross profit margin of 42%, has fallen by 6% every year.
The company’s industrial development service revenue growth rate was only 3% to 23.9 billion, and the gross profit margin was 77% (-15pct). It was mainly affected by the financial pressure of the local government in 2018. It is expected to gradually improve in 2019, and the gross profit margin and growth rate will improve simultaneously.
The settlement amount of the real estate development business segment increased to 51.5 billion (78%), and the gross profit margin increased from 22% to 30%, which was the main contribution point of high performance growth.
At the same time, the company accrued 2.5 billion assets impairment losses, of which 13.
700 million for bad debts, 9.
300 million is prepared for the decline in inventory prices. The local financial pressure has eased, and the environmental property market has picked up. It is expected that a large amount of asset impairment losses will be accrued again.
The financing situation turned into danger, and fortunately Ping An invested to join.
The company’s ending financing balance was 139 billion yuan, with an average financing cost of 6.
42%, of which the cost of issuing corporate bonds was from the beginning of 20186.
8% up to the end of the year.
3%, down to 5 in 2019.
The company has not used a credit line of 3,000 ppm.
The financial situation has improved markedly, with long- and short-term debt ratios reaching 4.
2 times, the positive combination of operating and financing cash flows in the fourth quarter.
New strategic positioning, commercial real estate + residential business + industrial new city develop together.
In the future, the company will start the business of management and export of commercial real estate in an asset-light mode, and gradually realize a combination of emphasis and reduce the risk of real estate development through commercial real estate operation and holding.
In terms of sales of commercial housing, in 2018, it achieved 162.8 billion (7%), and the proportion of Huanjing dropped to 54%. Hangzhou, Nanjing, Zhengzhou, Wuhan, and Hefei have gradually increased their proportion.
In terms of industrial new cities, the newly-added contract value was 166 billion yuan. Currently, 77 projects have been developed, 66 projects have been signed, and 48 repayments have been realized. The net cash flow has gradually turned into 20.
The land reserve is sufficient and the development space is huge.
The company’s existing owner’s land reserve is 1398 common, and the future has resources, land consolidation (about 2,400 common land for supporting land), and supporting land (approximately 200 million square meters) for planning and development.
Happiness and safety rank first and second largest shareholders, and the professional manager team has been completed.
As of April 8, 2019, the shareholding ratio of Huaxia Happiness Holdings was 36.
3%, China Ping An’s shareholding is 25.
The senior management team was granted stock investment and large-scale stocks in September 2018, with a total of 104.54 million shares, accounting for approximately 3% of the company’s total share capital.
54%, the strike price ratio is 27.
46 yuan / share and 13.
28 yuan / share.
Investment suggestion: Maintain overweight rating and lower earnings forecast.
The company received Ping An support on the financing side. The unique business model of the Industrial New Town is expected to continue to contribute to high-performance growth. Through the joint management team, the company is expected to overtake the 佛山桑拿网 commercial real estate sector in the future, thereby maintaining its overweight rating.
Due to the higher-than-expected budget and local financial pressure in 2018, we lowered our profit forecast for 2019-20 and supplemented our profit forecast for 2021: We expect the company to achieve net profit attributable to its mothers of 156/205/272 trillion in 2019-21, a growth rate above 32.5% / 31.
6% / 32.
8% (originally expected net profit attributable to mothers to be 164 in 2019-20.