Huaxia Happiness (600340) Q3 2019 Review: Improved recovery is a gradual improvement in balance sheet
The biggest feature of the company’s third quarterly report is that the sales contract amount and sales repayments have improved significantly, and this improvement is the most important substitute for the company’s improved balance sheet.
The company’s performance was in line with expectations.
The company achieved operating income of 643 in the first three quarters.
20,000 yuan, an annual increase of 42.
5%, achieving a net profit of 97%.
5 ppm, an increase of 23 in ten years.
7%, in line with market expectations.
We believe that the company is fully capable of meeting the Air Force’s profit commitments.
The operation continued to improve, and the sales contract 苏州桑拿网 amount and sales receipts improved significantly.
In the third quarter of 2019, the company’s sales receipts were 2.34 million yuan, an increase of 44 per year.
This pushed the sales receipts in the first three quarters to increase by 19 per year.
1%, reaching 84 last year.
In the third quarter of 2019, the company’s sales contract amount and sales area showed significant positive growth after a long absence, reaching 32, respectively.
8% and 44.
This shows that the company’s operation has shown obvious marginal improvement, and the most difficult time has passed.
We expect that the company expects sales receipts to increase by more than 25%.
Land acquisition is still difficult, and leverage is expected to remain high, but the company’s credit has been strengthened compared to the old one.
In the first three quarters of 2019, the company 杭州桑拿网 announced a significant increase in the scale of new land compared to the same period in 2018.
In addition, the company has launched new businesses in Wuhan and other places, and the scale of land investment has exceeded 10 billion yuan.
As many of the company’s projects are in the exhaustion period, the demand for land price payment is excessive, and even the company’s sales rebate conversion is accelerating, and we pay attention to project cooperation, we still expect the company’s leverage ratio will maintain a high level without a significant decline.
At the end of the third quarter of 2019, the company’s net debt ratio decreased slightly compared to the 2019 mid-year report, but still exceeded 200%.
However, due to the company’s shareholders’ background blessings and sales recovery, the credit is expected to have strengthened significantly compared to the past.
We do not expect the company’s financing costs to continue to rise.
The scale of accounts receivable is stable, and the balance sheet is expected to be optimized in the future.
After 2018, the scale of the company’s accounts receivable has increased significantly, and investors are increasingly worried about the operation of the company’s industrial new city.
At the end of the third quarter of 2019, the account receivables of the company decreased slightly compared to the middle of 2019.
We expect that through the optimization of the company’s operations, the receivables will first improve in structure (long-term age decline), and then decline in absolute size.
Risk warning: The company’s large-scale expansion of new businesses (such as the Wuhan project) may involve potential capital occupation and profit risks.
The industry environment is favorable for the company, and it is expected that the company’s balance sheet will improve.
In our opinion, the current situation of major metropolitan areas, including the surrounding Beijing, is more prosperous, and the real estate industry’s credit segmentation is even more serious.
We maintain the company’s EPS forecast for 2019/2020/20215.
80 yuan, maintaining 45.
With a target price of 79 yuan / share, we maintain the investment rating of “Buy”.