The First Coverage Report of China Reserve (600787): Estimated Land Degradation with Sustained Profitability

The First Coverage Report of China Reserve (600787): Estimated Land Degradation with Sustained Profitability

This report reads: The company’s land replacement value is reset to its estimated base, and new business models are actively explored.

But historical dividends are too low, and sustainable sources of profit still need to be nurtured.

Investment highlights: first coverage, rating “Neutral”.

The value of the company’s land is considerable. In the past five years, it has actively mixed reforms and cultivated new business models such as “car-free carriers”.

Profit cultivation still takes time, the time for collection and storage is uncertain, and profit forecasts have not been considered.

The 2019-21 EPS is predicted to be 0.

05/0.

07/0.

13 yuan.

Comprehensive reference to the logistics industry assessment level and land revaluation, January 2019.

1 PB, target price 5.

50 RMB.

The appreciation of land is obvious, and the collection and storage provide a way to realize cash.

China Reserve was a large-scale warehouse giant in the early days of its establishment. It accumulated a large amount of land in the early days. After the expansion of the city, its location 深圳桑拿网 advantage increased and its value increased significantly.

The company currently owns more than 6 million square meters of land. According to estimates of comparable land prices around the land, the land replacement price may exceed 15 billion, which obviously exceeds the book value of 2.5 billion.

During the period of 2012-18, the land acquisition and storage for six years totaled over US $ 3.5 billion in compensation for demolition, which is the main source of profit in recent years. Unfortunately, most of them can only be converted into shareholder dividends.

Strategic dating of ProLogis, leading mixed reform of state-owned enterprises.

In 2014, ProLogis became the second largest shareholder. ProLogis is an international leader with rich management experience in the high-end warehousing field. It has gradually 佛山桑拿网 promoted the company’s business transformation and upgrading and improved the company’s asset profitability.

The joint venture was established by both parties in 2018, and there may be new progress in the future.

The scale of “car-free shipping” business has grown rapidly.

China Storage Express (42% of the company’s shares) builds a large “car-free carrier” platform to improve the efficiency of matching the owner and the driver and reduce logistics costs.

Operating income for the past three years has been zero.

$ 1.5 billion.

Realized a small profit in 2018, and obtained Chengtong Group’s capital increase and shareholding.

It is expected that the future revenue scale will continue to grow rapidly.

Considering the nature of the business model and the two-way imbalance characteristics of long-term cargo flow determined by China’s economic geography, we believe that we should have a reasonable expectation of long-term profitability.

risk warning.

Economic demand risk, business risk, policy risk, business transformation risk