Tianjian Group (000090): State-owned enterprise reform planned to form a large construction platform

Tianjian Group (000090): State-owned enterprise reform planned to form a large construction platform

It is proposed to form a city-owned construction holding group, and the company ‘s business growth is expected to be announced by the company’s shareholders.The company’s stock resumed trading on November 4.

We believe that this establishment is in line with Shenzhen’s strategic plan to expand local construction and construction enterprises, and is conducive to enhancing the state-owned asset securitization and investment and financing capabilities.

The company gradually realized revenue of 60 in the first three quarters.

600 million, a year-on-year increase of +30.

6%; net profit 苏州夜网论坛 attributable to mother 2.

50,000 yuan, +42.

8%. If the construction group is successfully established and becomes the company’s controlling shareholder, we expect the construction and construction business scale of the company to reach a new level and maintain the company’s EPS of 19-21.

55/0.

69/0.

The 79 yuan forecast maintains an “overweight” rating.

The local construction industry market in Shenzhen is broad, but the state-owned construction state-owned enterprises are relatively weak in the emerging first-tier cities. The demand for infrastructure construction in Shenzhen is inconsistent. In 2018, the total output value of the construction industry was 347.1 billion.Investment is growing at 13% / 19% per year.

Participants in the Shenzhen construction market are still mainly state-owned enterprises. The local construction state-owned enterprises are small. The company has special qualifications for municipal engineering general contracting. It has the highest qualification level among city-owned construction state-owned enterprises. However, in 2018, its operating income exceeded 10 billion for the first time to reach 10.2 billion.Yuan, of which the construction income of urban construction projects was 6.7 billion yuan.

The company’s revenue accounted for only 3% of Shenzhen’s construction industry output value in 2018, which was lower than 24% of Shanghai Construction Engineering in Shanghai and 5% of tunnel shares, and 6% of Chongqing Construction Engineering in Chongqing.

The company’s construction orders increased rapidly, and the group’s formation further strengthened its core strength. The company started from the agent construction and housing construction business and gradually developed into a comprehensive construction group. The first three quarters of 2019 have gradually signed contracted unfinished orders of 29.8 billion, a year-on-year increase of 57.

2%; has won the bid for unsigned orders8.

800 million, a year-on-year increase of +208.

4%.

The construction company holding the proposed construction group, the registered capital of which is 5 billion US dollars, will be directly held by Shenzhen State-owned Assets Supervision and Administration Corporation after its establishment.

47% of the shares and state-owned shares of related construction enterprises in the state-owned assets system, 28 investment in land (property) rights of Shenzhen Investment and Control Co., Ltd. with unconfirmed rights were transferred to the group. The company, as the only listed construction-owned state-owned enterprise under the SASAC of Shenzhen,In the future, it is not possible to rule out the possibility of further resolving inter-bank competition through collective listing or asset restructuring.

The net profit attributable to mothers increased by 43% in the first three quarters. The Tianjiao project is expected to focus on revenue recognition in Q4. The company achieved a net profit attributable to mothers of 8.76 million yuan in the single quarter of 19Q3, a year-on-year increase of +129.

42%, due to the temporary consolidation of land settlement, the company gradually realized net profit attributable to mothers in the first three quarters2.

50,000 yuan, +42.

8%.

According to the company’s official website, on August 31 this year, the company’s Tianjian Tianjiao (Nanyuan) project sold 410 units in a single day, with a removal rate of nearly 80% and a sales value of more than 5 billion yuan. The company’s 2019 interim report showed that the project was expected to be completed within the year.We believe that if the house is handed over during the year, it will be expected to realize the centralized performance confirmation in Q4.

Dajian State-owned enterprise reform can be expected to maintain the “overweight” rating. According to the “Shenzhen Regional State-owned State-owned Enterprise Comprehensive Reform Pilot Implementation Plan”, total assets of municipal enterprises will reach 4 by 2022.

5 trillion yuan, revenue of 600 billion yuan, and profits totaling 100 billion yuan.

We believe that the establishment of the construction holding group is in line with the reform of Shenzhen’s state-owned enterprises. In the next few years, Dajian Construction will also become one of the key areas of state-owned assets reform. The company will gradually accelerate the development of “Dajian Construction + Big Management + Greenhouse Reform”.Large platform.

We maintain the projected company’s 10/19.

400 million net profit (real estate 7.

800 million + buildings 1.

900 million + properties 0.

700 million), maintain target price 6.

05-7.

15 yuan to maintain the “overweight” level.

Risk warning: The settlement of real estate sales is less than expected, and the profitability of municipal construction has improved.