Key investment points:
The company released the 2017 semi annual report. During the reporting period, the company realized an operating income of 559 million yuan, up 24.1% year on year; The net profit attributable to shareholders of the listed company was 448 million yuan, turning loss into profit on a year-on-year basis; Realized basic earnings per share of 0.48 yuan.
In the first half of 2017, the company's revenue increased by 24.1% due to the increase in property carry forward; During the same period, the company transferred its share holding company, making the net profit turn loss into profit. From January to June 2017, the company signed a relevant cooperation framework agreement with the management committee of Jiangxi Fuzhou High tech Industrial Development Zone and Zhuolang Technology to establish a project company, Jiangxi Songjiang Smart City Construction and Development Co., Ltd. (with a registered capital of 1.3 billion yuan, and the company's subscribed capital of 676 million yuan, accounting for 52% of the project company), with the project company as an investment platform, Actively promote the development and construction of Fuzhou Cloud Computing Data Center, Information Technology Industrial Park and livable living facilities projects. During the reporting period, Tianjin Hengtaihui Financial Assets Leasing Co., Ltd., a holding subsidiary of the Company, signed three financial leasing project contracts and completed the financial leasing business of RMB 648 million. In October 2015, the company and Tianjin Binhai New Area Wealth Management Co., Ltd. jointly established Tianjin Songjiang Wealth Investment Partnership (Limited Partnership) as a partner, and made an additional contribution of 4 million yuan in the first half of 2017. From January to June 2017, Tianjin Hongqiao Fortune Venture Capital Co., Ltd. (preparatory), an angel fund under Tianjin Songjiang Wealth Investment Partnership (limited partnership), an M&A fund established by the company and Tianjin Huixin Chuangfu Equity Investment Fund Management Co., Ltd., obtained the participation of Tianjin Science and Technology Commission's angel investment guidance fund, with a fund size of 35.35 million yuan, The Buyout Fund contributed 10 million yuan.
In February 2017, the Company signed the Framework Agreement on Major Asset Restructuring with relevant shareholders of Zoran Technology. In April 2017, the Company disclosed the Plan for Major Asset Purchase and Related Party Transactions to acquire 80% of the equity of Zoran Technology at a price of 1.184 billion yuan. In June 2017, the company signed a Strategic Cooperation Agreement with Huawei and other three parties to jointly explore the smart city field. In July 2017, the company obtained the building area of 65000 square meters of the underground parking lot in Nankai District, Tianjin.
Investment advice. Create a new model of real estate+smart city, actively expand to financial leasing, health care, and equity investment, and maintain the "overweight" rating. With the help of major shareholders' trunk line construction and primary development strength (helping the company to obtain secondary development projects at low cost), the company's real estate has formed a model of developing medium and high-end large market along the trunk line. In addition to maintaining Tianjin's competitive edge around the suburbs, the company also expanded its overseas projects through the advantage of large shareholders. We believe that the current reserve equity construction area of the company's projects is 3.37 million square meters, which can meet the development requirements in the next three years. At present, the company is building a new model of real estate+smart city, and actively expanding to financial leasing, health care, and equity investment. At present, the company's RNAV is 8.13 yuan/share. It is estimated that the company's EPS will be 0.73 yuan and 0.28 yuan in 2017 and 2018. Considering the company's business situation, RNAV was given as a six-month target price of 8.13 yuan to maintain the "overweight" rating.
Risk tip: The company faces the risk that the lease and sale are not as expected.
