Huafa (600325): Gross profit margin rises significantly, medium-term dividend exceeds expectations

Huafa (600325): Gross profit margin rises significantly, medium-term dividend exceeds expectations

Performance summary: The company released the semi-annual report for 2019 and achieved operating income of 142 in the first half of the year.

200 million (+50.

8%), achieving a net profit of 16.

600 million (+24.

9%), achieving net profit of return to mother 13.

80,000 yuan (+2.

8%).

The gross profit margin 南宁桑拿 increased and the first mid-term dividend plan was proposed.

The overall performance of the company’s interim results is stable, and the growth rate of performance significantly exceeds the revenue. 1) The increase in the proportion of high-price settlements has led to an increase in land replacement in 2019H1 216.

9% to 14.

100 million; 2) sales expenses and interest expenses exceeded the growth rate significantly higher than revenue growth; 3) there were 5 in the same period last year.

The investment income of 700 million joint ventures was only 0 in the reporting period.

200 million; 4) Minority shareholders’ equity increased to 2.

700 million.

Taking into account that the gross profit margin of the first half of sales increased.

7 up to 35.

0%, the increase in the settlement ratio in the fourth quarter and the 南宁桑拿 investment income of the joint venture will be confirmed in the second half of the year. It is expected that the company’s performance growth will be mainly reflected in the second half of the year.

In addition, the company intends to conduct an interim dividend for the first time, paying 2 yuan (including tax) for every 10 shares, which has exceeded expectations.

The company has ample distributable profits, and thereafter dividends may become the norm.

Sales increased rapidly against the trend, and the volume of goods will still be abundant next year.

In the first half of 2019, the company has signed about 435 contracts.

900 million, a 72-year growth of 72.

2% of the contracted sales area of 179.

10,000 countries, an increase of 62 in ten years.

0%.

In the first half of the year, the company’s equity ranked highest in the industry’s TOP35, and the sales growth rate significantly surpassed the average level of its peers and the industry, achieving high-speed growth against the trend.

The company lays out first-line and strong second-line products, focusing on mid- to high-end improved products. The average selling price in the first half of the year was 24,345 yuan per square meter, ranking among the top 35 in the TOP35 housing market.

In the second half of the year, the company’s new delivery value was more than the first half, and it is expected to reach 95 billion yuan (+ 63%).

At the end of the first half of the year, the company’s construction area was 1,158.

50,000 countries, an annual increase of 45.

4%, the company’s current soil transfer is under construction, and the sale speed under construction has been increased, which lays the foundation for sales growth next year.

Land acquisition or speeding up in the second half of the year, the Greater Bay Area actively reserves urban renewal projects.

During the reporting period, the company started construction 338.

90,000 cubic meters, which is equivalent to only 411 of the remaining land reserves retained by the company at the end of 2018.

1 GM has not yet started.

In view of the excessive land market in the first half of the year, the company was relatively cautious in acquiring land, and the land acquisition capacity was only 97.

20,000 countries, mainly located in Shanghai, Tianjin, Wuhan, Zhuhai and other core cities, will return to rational companies through the land market in the second half of the year to face more land acquisition opportunities.

In addition, the company’s urban renewal business in the Greater Bay Area has been progressing steadily. Except for Zhuhai Overseas, the company has actively reserved urban renewal projects in cities such as Guangzhou, Shenzhen, Zhongshan, and Jiangmen. Earnings forecasts and investment advice.

The company’s EPS for 2019-2021 is expected to be 1.

56 yuan, 2.

19 yuan and 2.

93 yuan.

Considering that the company’s turnover is accelerating, sales growth is increasing, and the credit rating is upgraded, the company is given a 7x estimate for 2019, with a target price of 10.

93 yuan unchanged, maintain “Buy” rating.

Risk reminder: performance may be lower than expected, tightening of funds or affecting sales performance.