\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 153 Xiamen C&D Inc(600153) )
Key investment points
The supply chain and real estate listing platform of China Construction Development Group is actually controlled by Xiamen SASAC
Xiamen C&D Inc(600153) is a listed company controlled by China Construction Development Group. It is a trading and real estate platform of the group. In 1998, China Construction Development Group converted the trade-related import and export departments of the group headquarters and four wholly-owned companies into shares and publicly issued a shares. As of September 30, 2021, China Construction Development Group holds Xiamen C&D Inc(600153) 47.38% of the equity, and the actual controller is Xiamen SASAC. The company’s dual main businesses of “supply chain operation + real estate” go hand in hand. In 2020, the company’s supply chain operation / real estate development business accounted for 81% and 19% of revenue respectively, and the contribution to the parent company’s net profit accounted for 40% and 60% respectively.
Supply chain: horizontal category expansion superimposed with vertical service chain extension, and the performance is expected to exceed the expected growth
According to the estimation of China IOT, the total sales volume of bulk commodities in China was about 80 trillion yuan in 2019, while the total operating revenue of the four leading bulk supply chains in China ( Xiamen C&D Inc(600153) , Xiamen Xiangyu Co.Ltd(600057) , Wuchan Zhongda Group Co.Ltd(600704) , Xiamen Itg Group Corp.Ltd(600755) ) in 2019 was 1.19 trillion yuan, accounting for less than 1.5%. As the leader of bulk supply chain operation, the company expands horizontally in bulk goods and vertically in bulk business service chain, and the company’s performance is expected to maintain relatively high growth.
Real estate: high-quality real estate, benefiting from the head trend promoted by strict industry norms
The real estate business of the company includes primary land development and secondary real estate development. The primary land development business is mainly in the charge of Xiamen Heshan construction, a wholly-owned subsidiary of China Construction and development real estate. The company’s secondary real estate development business includes residential, commercial, resettlement housing, etc., which are covered by the two subsidiaries of Jianfa real estate (54.65%) and Lianfa group (95%). The company is expected to be in the forefront of standardizing the business scale of the three-tier real estate enterprises and meeting the requirements of the three-tier real estate industry at the same time. Considering that the two major entities of the company’s real estate business operation are in the green file of “three red lines” of real estate, and the debt liquidity is relatively good in the industry, NAV valuation method can be used to evaluate the company’s real estate business. We estimate that the valuation of the company’s real estate business can reach 26 billion yuan.
Profit and valuation forecast
We expect the net profit attributable to the parent company from 2021 to 2023 to be 5.279 billion yuan, 6.124 billion yuan and 7.126 billion yuan respectively, with a year-on-year increase of 17.2%, 16.0% and 16.4% respectively. As one of the leading operators of the national bulk supply chain, the company has gradually transformed the whole chain service provider through the bulk price cycle. In addition, the development of the real estate business is expected to benefit from the concentration effect brought by the industrial policies and norms. The undervalued value plus high dividend has a safety margin, which covers the rating of “overweight” for the first time.
Risk warning: the bulk price fluctuates sharply; The promotion of supply chain model is not as expected; Fluctuations in the real estate industry.
