Huaxia Happiness (600340) Company Comments: Land Contribution Actively Increases Proportion in Non-Beijing Regions
Event: On January 17, 2020, the company released a briefing on operating conditions in January-December 2019: the company will achieve 1451 in 2019.
5.9 billion, at least -11.
21%; sales area is 1183.
360,000 countries, at least -21.
The insufficient value of goods caused its decline, and the proportion of non-Beijing regions continued to improve. 1) Pushing the market to reduce the volume resulted in a phased replacement of sales: the company’s real estate sales area in 2019 was 1183.
360,000 countries, at least -21.
23%; real estate development category 1027.
9.4 billion, before -20.
42%; the decrease in the company’s real estate contract decline in 2019 is mainly due to the decrease in the number of land acquisitions in 2018, resulting in insufficient projects available for sale in 2019.
2) The contribution of non-Beijing regions has been further enhanced: 1183.
The area ratio of 360,000 countries sold in Central Africa is 60.
65%, about 51 in 2018.
53% increased by 9.
In terms of absolute value, for the 12 units, non-Beijing regional sales in 2019 were roughly the same as in 2018, and performed well. The decline in volume was mainly dragged down by sales in the surrounding Beijing region (the area sold in Beijing in 2019 decreased by 262 GM compared to 2018).
3) Expected sales improvement in 2020: Considering the regional policies in Beijing may be improved and relaxed (Langfang City Government issued a draft on the reform of family members on January 14, 2020, and plans to relax and settle down); and the company’s land acquisition will increase significantly in 2019(The amount of land acquisition + 204% per year), it is expected that the company’s sales in 2020 will be better than 2019, and sales are expected to improve.
Real estate development business is actively acquiring land, Wuhan project is landing heavily 1) Active land acquisition, national layout: The company’s land acquisition in 2019 is 31.1 billion, an increase of + 204% from 2018; the newly acquired land area is 421, which is higher than 2018+ 63%, the company’s land acquisition has been greatly improved, laying a foundation for the company’s future sales and performance 成都桑拿网 growth.
2) Wuhan project landed heavily: In September 2019, the company obtained two parcels of land in Wuhan, located in the Wuchang area of Wuhan’s main urban area, with a turnover of 11.6 billion yuan.
This project is adjacent to the main axis of the Yangtze River and belongs to the core area of Binjiang CBD that is planned by the government.
The company started the company’s new business layout in central China with Wuhan as its core, further extending the company’s development strategy for new business development such as commercial office and urban renewal.
Improved financing and cash flow, stable business growth in the new industrial city 1) Significant improvement in financing volume and significant improvement in cash flow: As of the third quarter of 2019, the company’s cash inflow from financing activities reached 苏州夜网论坛 93.9 billion, an increase of 66% over the same period last year; meanwhile, sales of goods received labor servicesCash was 63.1 billion, previously + 19% (due to the decrease but the increase in sales income, it can be seen that the company’s return rate has improved significantly), and a large amount of capital inflows provides a strong guarantee for the company’s subsequent development.
2) The industrial new city business is steadily advancing: the company’s settlement income in the industrial park in 2019 is 381.
3.1 billion, previously +22.
85%; At the same time, the company’s housing rental income2.
5.5 billion, +74 in ten years.
97%; rented area 90.
620,000 countries, +90 per year.
73% of the company’s industrial new city main business and rental business is actively and healthy development.
Investment suggestion: The company’s sales in 2019 are not enough to improve due to the inventory, but the main business of the industrial new city is actively promoted, the settlement amount has increased steadily, and the proportion of non-Beijing regions on the sales side has further expanded.
We believe that the short-term residential sales growth, the main industry of the company’s industrial new city is not changed actively and healthy development, and the park model replicates the long-term logic of successful expansion.
The company’s EPS for 2019-2021 is expected to be 5.
75 yuan, corresponding to the current PE of 5.
12x, maintain “Buy” rating.
Risk reminder: Tighter-than-expected tightening of city budget policies; the company’s sales repayments fall short of expectations.