### Sunshine City (000671) 2019 Semi-annual Results Express Review Comments： High performance, cautious margin improvement, lower debt ratio

Sunshine City (000671) 2019 Semi-annual Results Express Review Comments: High performance, cautious margin improvement, lower debt ratio

Matters: On the evening of July 15, Sunshine City released the semi-annual results report for 2019.The company’s total operating income in 2019H1 was 225.92 ppm, an increase of 48 in ten years.56%; net profit attributable to shareholders of listed companies14.48 ppm, an increase of 40 in ten years.38%; basic return is 0.31 yuan, an annual increase of 24.00%. Comment: The annual performance of 19H1 reached + 40%, the profit margin increased, and the debt ratio decreased. The report gradually improved the company’s operating income in 1951.920,000 yuan, +48 a year.6%; net profit attributable to shareholders of listed companies14.48 ppm, +40 a year.4%; basic income is 0.31 yuan, +24 a year.0%; net sales profit margin 64%, an increase of 1.1pct; estimated average return on net assets 6.91% for ten years +1.71 points. At the end of 19Q1, the company received 729 advances.500 million, +43 a year.2%, covering the real estate settlement income of the previous year1.31 times.The 19H1 final asset-liability ratio and net debt ratio were 83.5% and 141.9%, a decrease of 0 from the end of 18 years.88 points and 40.3pct; interest-bearing debt is 112.1 billion, at least -0.5%, the report gradually improved. 19H1 is 90 billion, before + 29%, the value of soil storage is 560 billion, 75% is located in the first and second line 19H1 company sales of 900.70,000 yuan, an increase of 28 in ten years.7%; equity ratio 64%, Kerui ranked 13th; of which strategic cities in the Mainland and the Yangtze River Delta accounted for 34% and 36%, respectively.19H1 company took the amount of 284.5 trillion, of which equity ratio is 80%; land area is 516.6 Generally, the average land price is 5,508 yuan / flat; the amount of land acquisition accounts for 32% of the current sales amount, and the average price of land acquisition accounts for 43% of the average sales price. Overall land acquisition is still cautious.As of the end of 2018, the company had a land reserve (unsettled caliber) of 44.18 million square meters, with an equity ratio of 63%; the cumulative cost of land price was only RMB 4,339 / square meter, accounting for only 杭州桑拿网 34% of the average sales price in 2018; the corresponding saleable value was 5,681 Ten thousand yuan, covering the sales amount in 20183.5 times to ensure a high increase in subsequent sales.In terms of saleable area distribution, strategic cities in the Mainland accounted for 48%, mainly including Changsha, Nanning, Xi’an, Chongqing, Taiyuan, etc., which accounted for 7 respectively.5%, 5.8%, 5.3%, 4.6%, 4.5%, the five major cities together accounted for 27.7%; Greater Fujian, the Yangtze River Delta and the Pearl River Delta are evenly distributed, 15%, 17% and 15% respectively.In terms of energy levels, the area of the first and second lines accounts for 65%, and the value of goods accounts for 75%. Investment suggestion: high performance, take local measures, increase profit margins, and decline in debt ratios. Maintain the “strong push” of Sunshine City, which started in Fujian, cultivated the strong second line, and experienced the contributions of three star management teams. The company achieved seven years and 70 times sales.High growth, expected to be the basis for future settlement heavy volume; the comprehensive transformation of the “Shuangbin” team after the joint venture is also expected to bring refinement and standardization of management, meanwhile, the company’s initiative to deleveraging and alternating liquidity will allow the company’s sales and performance to be relatively loose.Elasticity coefficient, and achieve quantitative and qualitative improvements, and estimates are also expected to be improved.We maintain forecasts that the company’s annual earnings for 2019-21 will be 1.00, 1.35 and 1.81 yuan, the current price corresponds to 2019 PE6.6 times, and a 56% discount from the previous NAV, maintaining a target price of 10.00 yuan, equivalent to 2019 PE10.0 times, maintaining the “strong push” level. Risk warning: The real estate industry’s policies have tightened more than expected and the industry’s financing has tightened more than expected.

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