Guangming Real Estate (600708) Annual Report Comments: Sales continue to grow steadily and actively expand into the future

Guangming Real Estate (600708) Annual Report Comments: Sales continue to grow steadily and actively expand into the future

Core Views The company released its annual report. In 2018, it realized revenue of 20.5 billion US dollars, about -2%; realized net profit attributable to mothers of 1.4 billion US dollars, -27% per year; the average ROE was 12.

9%, at least -7.

3 units; a cash dividend of 2 yuan is planned for every 10 shares, with a dividend rate of 31.

9%, ten years +14.

3 units.

In addition, the company released a quarterly report. In the first quarter of 2019, it realized revenue of $ 3.2 billion, every + 6%; and achieved net profit of $ 400 million, about -28%.

The company’s performance was lower than expected.

The company is the only real estate listed entity affiliated to Guangming Group. We expect the company to transform the group’s strengths, actively expand, accelerate turnover, sprint 30 billion sales goals, and achieve steady growth in performance.

We expect the company’s EPS to be zero in 2019-2021.

70, 0.

80, 0.

96 yuan, maintain “Buy” rating.

The growth of gross profit margin improved. The increase in performance was mainly due to the increase in carry-over scale and investment income. In 2018, the company carried forward the project with a higher level of profit. The gross profit margin of the development business was 32%, with 11 replacements at a time, but the performance could be reduced at most.Yes: 1) The completed area is 1.42 million square meters, -42% per year, leading to the expansion of the real estate carry-over scale, with development business revenue of $ 19.6 billion, an interval of -2%; 2) The sale of equity in the project company in 2017 led to an investment income of 1.3 billion, andAffected by the carry-forward rhythm in 2018, investment income increased by zero.

5 ppm; 3) The expected increase in land caused an increase of 800 million yuan in taxes and surcharges; 4) Withdrawal of inventory depreciation provisions for projects such as Yantai, Nanning, Jinhua, and Heze led to an increase of 400 million yuan in asset impairment losses.

The company’s Q1 performance continued to decline, mainly due to the high base of the 18Q1 sale of Shanghai Lishui Road high-margin commercial projects.

Sales remained stable and development efforts increased significantly. In 2018, the newly started area was 4.73 million square meters, each time + 85%; the sales area was 2.06 million square meters, 6% each year; the sales amount was 24.5 billion US dollars, each time + 3%.30 billion yuan efforts.

The company expanded and accelerated, using methods such as bidding, auctioning, mergers and acquisitions, and government coordination to increase the actual reserve area by 1.45 million square meters, + 53% per year.

As of the end of 2018, we have calculated 1.32 million square meters of reserve capacity and construction area, 4.86 million square meters of uncompleted capacity and construction area, and 6.18 million square meters of soil storage area, of which first-tier (Shanghai only), second-tier, third-tier and fourth-tier cities account for 18%, 43%39%, the Yangtze River Delta accounts for 65%.

In the first quarter of 2019, the area of newly added real estate reserves increased by + 35%, maintaining a higher level of expansion. In the future, we will continue to develop the advantages of the Group, in projects such as Shanghai affordable housing and urban village reconstruction, Chongming Island development, and internal soil storage docking of the Group.Seek opportunities.

Generous dividends are given back to shareholders. The Group’s endorsement highlights the financing advantage. In 2018, the company significantly strengthened its dividend distribution and planned a dividend rate of 31.

9%, an increase of 14 per year.

3 units.

Due to continuous development, the company’s interest-bearing debt (including perpetual debt) was US $ 37.2 billion at the end of 2018, with a long-term growth of 69%, and the net debt ratio increased by 93 alternatives to 226%.

However, the endorsement of Guangming Group, a shareholder with a background of state-owned enterprises, strives to maintain a good financing advantage. The report actively promotes financing through multiple channels such as preliminary bills, perpetual bonds, final purchase ABS, and cold chain warehouse logistics CMBS.Reduction decreases by 0.

1 up to 5.


Actively develop the future of the war, maintain the “Buy” rating until the company’s carry-over scale expands but the project profit level is higher than expected. We lower the forecasted revenue and increase the gross profit margin. The company’s EPS 北京夜网 for 2019-2021 is expected to be 0.

70, 0.

80, 0.

96 yuan (previous value was 0 for 2019-2020).

92, 1.


Refer to comparable companies for October 2019.

6 times PE estimation, we think the company’s reasonable PE estimation level in 2019 is 10-11 times, and the target price is 7.


70 yuan (previous value was 4.


98), maintain “Buy” rating. Risk warning: there is uncertainty in the pace, scope and intensity of industry policy advancement; overlapping real estate fundamentals may drag down company sales; low land reserves; rapid growth of resistance brings pressure on the capital chain.