Huafa (600325) Interim Review: Sales Flexibility Releases Interim Dividends As Expected, Shows Sincerity
Core Views The company released a semi-annual report.In 2019H1, it realized revenue of US $ 14.2 billion, every + 51%; realized net profit attributable to its mother of US $ 1.4 billion, exchange rate + 3%; it is planned to distribute an interim dividend of 2 yuan for every 10 shares;Interim dividends exceeded expectations.
The company’s abundant cargo value has helped usher in a new opportunity in 2019. It is expected to seize the advantages of financing to replenish inventory in the second half of the year. The deep resources of the company and major shareholders in the Guangdong-Hong Kong-Macao Greater Bay Area will benefit from regional dividends.
We maintain EPS for 2019-2021.
Earnings forecast of RMB 35, maintain “Buy” rating.
The development business achieved both quantitative and qualitative growth, with sufficient cash to support intermediate dividends. In the first half of the year, the company’s South China (excluding Zhuhai), Central China, and Shandong regional projects entered a period of centralized settlement.52%, while gross margin increased by 10.
3 up to 35.
The main reason for the slower-than-expected earnings growth is: First, the investment income base last year was large.
700 million to 0.
2 trillion; Second, the combined income of consolidated cooperation projects, the minority shareholder’s profit and loss ratio increased to 16% every +17; Third, taxes and additional / revenue extensions +5 substitutions, cumulative gains / profits over +4Excellent to 26%.
In the initial period, the company’s annual report dividend rate has decreased, and in the first half of the year, the company’s monetary funds and net cash flow from operating activities reached a record high. The interim report plans to distribute a cash dividend of 2 yuan for every 10 shares, which shows the company’s sincerity.
The sales growth rate was released as scheduled, benefiting from the improvement of the Zhuhai market. The company improved its development efficiency in the first half of the year, with a new construction year of + 67%.
In Zhuhai, under the support of East China’s dazzling performance, the sales area was six months + 62%, and the sales amount was ten years + 72%. The growth rate steadily ranked at the forefront of mainstream housing companies.
We expect to push more than 800 trillion goods in the second half of the year. The South China and Central China projects will work hard to gradually sell more than 800 trillion, which will impact 900 trillion, corresponding to a growth rate of 55%, showing growth.
Since October 2018, Zhuhai Doumen, Jinwan and other regional talent purchase policies have improved. In May this year, the social security requirements in the Western District, High-tech Zone and Xiangzhou District were further relaxed, and support for outstanding talents was strengthened, which helped the Zhuhai market gradually improve.
As a local leader in Zhuhai, the company is expected to continue to benefit from regional dividends.
The rating upgrade shows the financing strength, and it is expected to achieve the growth target in the second half of the year. Until this year, the company’s financing channels have remained unblocked, and the financing cost advantage is significant. Through short-term financing, Chinese votes, private placement bonds, corporate bonds, ABS financing, nearly 7 billion US dollars, interest rate rangeIs 2.
In June, Union Credit raised the company’s main credit rating from AA + to AAA, and the market recognition was further improved. In 2019H1, the net debt ratio decreased slightly by 3 values to 266%.
Supported by abundant saleable resources (our target is US $ 330 billion worth of equity in 2019H1), the company controlled the pace of land acquisition in the first half of the year, with a total land price of US $ 5 billion, and added equity of 690,000 square meters, -17% per year.
In the second half of the year, with the tightening of financing and the decline of the land market, the company is expected to seize the opportunity to replenish its inventory.
The interim dividend exceeds expectations and we maintain a “Buy” rating. We maintain the EPS for 2019-2021.
35 yuan profit forecast.
Refer to comparable companies for July 2019.
8 times PE estimate. Considering that the company’s net debt ratio is high, we believe that the company’s reasonable PE estimate for 2019 is 7-7.
5 times, target price 10.
95 yuan (previous value was 11.
97 yuan), maintain “Buy” rating.
Risk reminders: risks in the capital chain; regional market risks caused by the concentration of layout expansion; there are potential risks in the sales of the real estate 武汉夜网论坛 industry, and company sales may be dragged down by the industry.