China Merchants Shekou (001979): Uneven carry-over between quarters leads to gradual land acquisition, and completion will accelerate

China Merchants Shekou (001979): Uneven carry-over between quarters leads to gradual land acquisition, and completion will accelerate

Diluted earnings in the first quarter of 19 (0).

32 yuan, a year-on-year decrease of 56%, in line with expectations of the first quarter results announced by China Merchants Shekou: operating income of US $ 4.4 billion, a continuous decline of 54%; net profit attributable to mothers of US $ 2.6 billion, a decrease of more than 55%, consistent with the performance forecast

Uneven carry-over between quarters resulted in 50% of profitable listings.

The company’s carry-over area in the first quarter decreased its operating income by 54%, and its gross profit margin decreased by 15 segments to 26%. The gross profit carried forward gradually decreased by 71% to US $ 1.1 billion; the company realized investment income of 3.3 billion yuan (mainlyThe transfer of equity in the two subsidiaries resulted in net income after tax deductions22.

500 million), a decline of 15% each year.

The net profit margin attributable to the mother was finally recorded at 60%, down 2 samples from the same period last year.

The net interest rate increased, and the cost advantage of the financing side was prominent.

The company’s net debt ratio at the end of the first quarter increased by 12 times to 67% from the beginning of the year, but decreased by 8 copies from the same period of last year (75%); the cash in hand covers interest denies due within one year1.

5 times.

Pioneer Company to 2.

98% and 2.

80% of the coupon rate issued two ultra short-term financing bonds to raise US $ 5 billion, and the financing cost is at the lowest level in the industry.

Development Trend Initial sales expectations exceed targets.

In the first quarter of 2019, the company achieved a contracted amount / sales area of 37.9 billion / 1.89 million square meters, an annual increase of 21% / 27%, significantly higher than the industry average.

We estimate that the company is expected to exceed the sales target of 2,000 megagrams (an increase of 17%) with the support of over 3500 megagrams of saleable value.

It is expected that from the second quarter on, the speed of land acquisition will be accelerated, and the completion of preliminary 重庆耍耍网 plans is expected to double.

In the first quarter, the company ‘s new soil storage and construction area decreased by 72% to 1.01 million square meters. We expect that the company will continue to expand steadily, and the intensity of land pick-up will increase significantly in the second quarter., Corresponding to a growth rate of 101% per second.

Property listing, market competitiveness attempts to significantly improve.

In April 2019, the company announced that China Merchants Property will be reorganized and listed with AVIC Sunda, a real estate platform owned by AVIC, and the new company’s management area after the integration of the two central SOE property management businesses will reach 1.

300 million square meters, property management income of 6.6 billion US dollars, net profit attributable to mother over 300 million US dollars, is expected to become a new leader in the property management industry.

Earnings forecast We maintain our 2019 / 2020e earnings forecast forecast 2.

31/2.

72 yuan unchanged.

Estimates and recommendations The company is currently trading at 9.

4/8.

0x 2019 / 2020e P / E ratio, maintaining recommended level and target price of 27.

78 yuan, the target price corresponds to 12.

0/10.

2x 2019 / 2020e target P / E ratio and 27% upside.

The main layout of the risks is the tightening of urban adjustment policies beyond expectations; Qianhai’s land development progress has fallen short of expectations.