Financial Street (000402) Annual Report Comments: Ready to resume growth

Financial Street (000402) Annual Report Comments: Ready to resume growth
Investment points Contract sales began to resume growth, and the company resumed its growth trend.The company achieved sales of 30.7 billion yuan in 2018, an annual 成都桑拿网 increase of 30.3%; there is a more obvious rebound compared to 2017.Achieved sales area of 107.90,000 square meters, an annual increase of 2.4%.  Operating income lags slightly, affected by the contraction of contracted sales in 2017, but the settlement gross margin increased.  Realized operating income of 221 in 2018.1 ppm, an increase of -13 in ten years.3%; net profit attributable to mother 32.7 ppm, a ten-year increase of 8.7%; realized basic profit income is 1.09 yuan, an annual increase of 8%.The settlement gross margin for the real estate business was 48.6%, a further increase of 19.1 from 2017.2 units.  Restart expansion and keep the ground stable.The company added a total construction area of 4.07 million square meters in 2018, of which 84 were in first- and second-tier cities.0%; total land acquisition amount is 218.400 北京桑拿洗浴保健 million, the equity ratio is 87%.The proportion of newly added land acquisition amount and sales amount was 71.1%, staying high.Among the company’s newly acquired projects, the long-term development complexes overlap, and the proportion of holding properties is relatively high.Higher short-term land investment does not necessarily translate into recent sales amounts, so the ratio of land acquisition amount to sales amount has remained at a high level for a long time.  The company’s financing costs remained at any level in 2018.In 2018, the company’s net debt budget was 184%, and the comprehensive financing cost was 5.85%, lower than the industry average.The financing environment tightened in 2018, and the company still maintained the financing cost of ownership, showing its advantages in financing.  The company’s investment real estate continued to grow.In the incremental part, the proportion of transfers from inventory is increasing.The overall rental yield of the company’s investment real estate is about 4.51%, a higher level in first and second tier cities.  Investment suggestion: The company restarts its growth trend, focuses on the core first and second tiers, has low financing costs, and steadily improves the scale and efficiency of investment real estate. It will continue to benefit from the recovery of core city fundamentals in the future.The company’s EPS for 2019-2020 is expected to be 1.30 yuan and 1.62 yuan, calculated based on the closing price on March 29, 2019, the corresponding PE is 6.6 times and 5.Three times, maintain prudent overweight rating.  Risk Warning: Substantial tightening of monetary policy, real estate budgets in core cities exceeded expectations, residents’ deleveraging efforts exceeded expectations, and real estate taxes were introduced beyond expectations.