In 2007, the company achieved operating income of 836 million yuan, an increase of 44.23% over the same period last year; net profit of 106 million yuan, an increase of 89.21% over the same period last year; net profit excluding non-recurring profit and loss was 27 million yuan, down 46.17% from the same period last year; and basic earnings per share was 0.38 yuan.
In 2007, the company formulated the main business transformation strategy, that is, from a diversified main business company to a professional real estate company that highlights the core position of industrial real estate.
The strength of major shareholders and their support to listed companies are the foundation of the company's development strategy.
Under the guidance of the transformation strategy, the company has advanced and retreated, combed the business of subordinate holding subsidiaries and stripped off the shares and assets that are not in synergy with the business development strategy.
In order to promote business development, in September 2007, the company completed a private placement, raising a total of 878 million yuan, and planned to invest in the third phase of Haitai Green Industry Base and the high-end residential area of Haitai in Lingshi County. The development progress of the project in 2007 is in line with expectations.
In 2007, the company's new industrial real estate project is gradually becoming large-scale. Three new construction projects are added: the "Core area of the National Software and Service Outsourcing Industry Base of Tianjin High-tech Zone", the Haitai Industry-University-Research Base Project and the Haitai Innovation Base Project, with a total planned construction area of about 900000 square meters.
With the successive completion of the existing industrial real estate projects and the follow-up asset injection by major shareholders, the company's earnings per share in 2008 and 2009 are expected to be 0.58 yuan and 0.80 yuan respectively. According to the closing price of 17.68 yuan on February 19, the dynamic price-to-earnings ratios of 2008 and 2009 are 30.48 times and 22.10 times respectively. We are optimistic about the transformation of the company's main business to industrial real estate development and operation, as well as the company's business policy of combining short-term benefits with long-term development, giving short-term "overweight" and long-term "buy" investment ratings.
Risk hints: the timing of asset injection by major shareholders is uncertain; the expansion of the company's development scale puts forward higher requirements for asset management and operation; real estate regulation and control policies will have an impact on the profitability of the company's residential projects.
