Huafa shares (600325) quarterly report comments: performance volume and price rise to maintain rapid growth
Core Views The company released a quarterly report and achieved revenue 67 in Q1 2019.
100 million US dollars, a year-on-year increase of 318%; net profit attributable to mothers5.
6 ‰, an average of 5% for ten years.
Taking into account the high base generated by investment income in the first quarter of 2018, the company’s performance in the first quarter of 2019 was only a slight shift, exceeding our expectations; supported by ample value, the company’s sales growth led the mainstream housing companies.
Considering that the Q1 performance of real estate companies is generally not very informative, we maintain the EPS for 2019-2021.
Earnings forecast of RMB 35, maintain “Buy” rating.
The carry-over scale and quality rose steadily, and the performance remained stable under a high base. The company’s first quarter settlement and consolidated project volume and price also rose. Wuhan, Zhuhai, Guangzhou, Shanghai, and Zhongshan project settlements (over 90%) promoted revenue growth of 318%., Gross profit margin increased by four years.
2 up to 31.
At the same time, due to the higher profit level of the project and the scale of land, taxes and surcharges accounted for 2% of revenue.
7 up to 9.
During the period, the company’s cost management and control efficiency improved, and the sales management expense ratio of the flow caliber decreased year by year.
2 up to 2.
The high base in the first quarter of 2018 due to the recognition of investment income by the equity method, and the steady performance in the first quarter of 2019 reflected the flexibility of the company’s performance release.
As of the first quarter of 2019, the company’s advance receipts amounted to 42 billion yuan, a further increase of 8% over the end of 2018. Compared with the 2018 development business revenue coverage coverage rate of 185%, it can carry abundant resources.
Sales growth led the mainstream housing companies, and further strengthened the first- and second-tier cities in 2019Q1. The company achieved a sales area of 75.
40,000 square meters, an increase of 58% in ten years; sales of 183.
10%, an annual growth rate of 83%, leading the mainstream housing enterprises.
We estimate that the company’s saleable value will exceed 140 billion in 2019, with too many pushes, and the push area will become more balanced. The 北京夜生活网 sales amount is expected to exceed 80 billion, and we will work towards 100 billion biology, with a corresponding growth rate of more than 40%.
In 2019Q1, the company won the Wuhan Jiang’an District site, and through the cooperation of housing and enterprises, it added new projects in Shenzhen’s Guangming District and Nanjing’s Jiangning District to supplement the land storage area of about 540,000 square meters, further strengthening the first- and second-tier cities.
We expect the company’s land acquisition to grow steadily in 2019, and the amount of land acquisition will be more than 350 trillion points, which is the gradual basis for subsequent growth.
Guangdong, Hong Kong, and Macau have abundant land reserves, and the Group’s endorsement highlights the advantages of financing. As of the end of 2018, the company 武汉夜生活网 has deployed nearly 30 cities, with a total land storage capacity of 14.74 million square meters. The first-tier, second-tier, and third-tier cities account for 6%, 42%, and 52%, of whichZhuhai (third-tier cities) accounts for 20%.
Guangdong, Hong Kong, Macao, Yangtze River Delta, Bohai Rim, Midwest and other cities accounted for 32%, 14%, 21% and 33% respectively.
With the Guangdong, Hong Kong and Australian dollars, Zhuhai Hengqin International Tourism Island and other regional advantages gradually break through, asset values continue to be released.
Due to the accelerated development rate since 2017, the company’s net debt ratio is relatively high. The increase in interest-bearing debt in 2019Q1 resulted in an increase in net debt ratio by 8 to 257% over the end of 2018.
Participated in the endorsement of Huafa Group, the controlling shareholder of the state-owned enterprise, and the company maintained its financing advantage. The average financing cost in 2018.
87%, 1.5 billion corporate bonds will be issued in the first quarter of 2019, and the interest rates will not exceed 5%.
Maintain high-speed growth and maintain a “buy” rating. The company has proven its growth ability in the last round of growth. Since 2017, the company has increased its land acquisition speed, the national layout has become more balanced, and the policy environment has improved.Boosting its new opportunities in 2019.
The deep resources of the company and major shareholders in the Guangdong-Hong Kong-Macao Greater Bay Area will also benefit from the boost of regional dividends.
We maintain EPS for 2019-2021.
35 yuan profit forecast.
With reference to 9 times PE estimates of comparable companies in 2019, considering that the company’s net debt ratio is high, we believe that the company’s reasonable PE estimate for 2019 is 7.
8-8.2 times, target price 11.
97 yuan (previous value was 13.
60), maintain “Buy” rating.
Risk reminders: risks in the capital chain; regional market risks caused by the expansion and concentration of the layout; potential risks in the sales of the real estate industry, and the company’s sales may be dragged by the industry.