Songdu Shares (600077): Achieving a trough in performance and optimizing financial structure

Songdu Shares (600077): Achieving a trough in performance and optimizing financial structure

Investment highlights: The company announced its 2018 annual report and achieved revenue of 45.

900 million, a year-on-year increase of 67%; net profit4.

1 billion, an increase of 164 in ten years.

2%, the corresponding EPS is 0.

31 yuan, located in the middle and upper range of performance forecast.

The company plans to distribute 0 cash dividends for every 10 shares.

31 yuan (including tax).

  Ping An’s View: Increased settlement growth and higher gross profit margin drive high performance: The company achieved revenue of 45 in 2018.

900 million, a year-on-year increase of 67%; net profit4.

1 billion, an increase of 164 in ten years.


The main reasons for the high performance increase are: 1) high yields; 2) gains in the property market in the previous period, and gross profit margins rising.

5 up to 42.


The account advances at the end of the period amounted to 96 trillion, which is the current revenue2.

1x, the foundation for expected future performance growth.

  High sales growth and stable land acquisition: The company achieved scheduled 101 in 2018.

400 million, an increase of 44 in ten years.

4%, sales area 54.

70,000 square meters, an increase of 26 in ten years.


The average selling price is 18524 yuan / square meter, an increase of 14 per year.


In terms of sub-items, Fuyang Jiangyao House this year was 1.9 billion, Poyang Yuehai House was 1.5 billion, and Dinghai Park Yue House was 1 billion, which contributed to the main sales projects, with a total sales ratio of 43.


The company continues to take the Yangtze River Delta as the core of land acquisition, and further expands the Hangzhou area. At the same time, it has comprehensively laid out high-quality land in emerging cities such as Zhoushan, Ningbo, Anhui, Nanjing, and Guangxi to achieve cross-domain development.

Initially supplemented 360,000 m2 of soil reserves, which is the basis for the subsequent sales scale expansion.

The company actively improved the quality and growth rate, and gradually contributed to the development of Jiangyao, Chunjiang Coast and Ruyixihu projects.

  Expansion of business scope and substantial progress in the field of health: the integration of the company’s wholly-owned subsidiaries and state-owned enterprises in Qijiang District of Quzhou City formally changed the “World (Qijiang) Food Safety Innovation Demonstration Base Fuli Land 北京桑拿洗浴保健 Contracting Management Right Transfer Agreement”The total agricultural land area is about 3.

60,000 acres.

Through the establishment of a new agricultural industry town of planting, breeding, processing, and marketing, and an integrated food safety guarantee system for testing, evaluation, auditing, and certification, it will effectively intervene in the upstream health of the health industry with seeds and food safety as its core.
At present, the People’s Government of Qinjiang District of Quzhou City has officially issued the first “Certificate of Management of Rural Land Circulation and Management,” with a land area of 4,317 acres.

  Optimized financial status, employee shareholding stakes: Affected by sales boost, net cash flow from operating activities exceeded 35.

700 million to 35.

8 billion.

Net debt ratio at the end of the period, after excluding advance receipts 12%, 40.

8%, a decline of 80 per year.

5, 6 points; 36 cash in hand at the end of the period.900 million, which is 260 of debts due within one year.

7%, an increase of 170 from the beginning of the year.

At 6 per share, the short-term debt repayment pressure has dropped significantly.

The company insists on cash as the king, and the supplementary sales recovery rate remains above 92%. At the same time, it expands financing channels and completes the issuance and issuance of special debt for housing leasing. The proposed fundraising does not exceed 1 billion yuan.

Initial average financing cost 6.

23%, in the middle and lower levels of the industry.

The temporary company employee shareholding plan gradually bought 33.03 million shares, accounting for 2 of the total share capital.

46%, average price 3.

89 yuan / share, showing confidence in future development.

  Investment suggestion: After the completion of the previous period of low-margin projects, the company’s performance has gradually stepped out of the previous period. The improvement of quality and speed has led to the development of projects and the carry-over speed. The company’s EPS in 2019 and 2020 will be raised to 0.

37 (+0.

12) Yuan and 0.

45 (+0.

15) Yuan, the current sustainable corresponding PE is 9 respectively.

9 times and 8.

2 times.

Considering the impact of the price-limit policy in 2017-2018, the company’s short-term ultra-high gross profit margin is difficult to continue, maintaining the “recommended” level.

  Risk reminders: 1) The relationship between market supply and demand has a huge impact on the real estate industry. First-tier attractions cities and third- and fourth-tier cities are heavily differentiated. Monitoring and grasping of different markets, as well as product structure adjustments and marketing strategy adjustments when risks ariseRequirements; at present, the property markets in the third and fourth lines have entered the adjustment channel, and the overshooting of the property market in the first half of 2019 did not see the risk of loosening policies; 2) major adjustments in the property market brought asset impairment and performance below expectations; 3) largeThe development progress in the health field is less than expected risks.