Basic performance of the company: In 2011, the company achieved operating income of 865 million yuan, an increase of 17.12% over the previous year; operating profit of 3.43 million yuan, an increase of 208.07% over the previous year; net profit attributable to the parent company was 15.66 million yuan, an increase of 18.12% over the previous year; and basic earnings per share was 0.09 yuan. Profit distribution: No disbursements, no transfers.
Operation is generally based on investment income to drive performance: In 2011, the company relied on the high-quality resources of “three circles and one heart” to carefully build the “three major shopping centers” of Ginza Shopping Center, 21st Century Shopping Mall, and Wuzhan Shopping Mall to achieve competitive development in the three main businesses of retail, exhibition, and commercial real estate. The Ginza Shopping Center achieved sales of 164 million yuan throughout the year, an increase of 6.16% over the previous year, with sales of the new Ginza and the transformation of the old Hanyang shopping mall; the 21st Century Shopping Center achieved annual sales of 420 million yuan and operating profit of 449.352 million yuan, up 26.04% and 20.43% respectively over the previous year, consolidating its dominant position in the Wangjiawan business district. The Wuzhan shopping center was upgraded for the fourth time, adding 8,000 square meters of operating area, and the total operating area reached 24,000 square meters, making it one of the largest shopping malls in the city. It achieved annual sales of 106 million yuan and operating profit of 13.137,700 yuan, up 8.17% and 9.04% respectively over the previous year. The exhibition industry has formed a pattern where exhibitions are the lead, and business sectors such as exhibitions and conferences, square advertisements, and commercial retail go hand in hand, with comprehensive facilities such as hotels, restaurants, entertainment, and parking. It held 121 exhibitions of various types, more than 500 large and small conferences, and more than 200 square events, and continued to maintain its leading position in the exhibition industry in Wuhan, achieving annual revenue of 559.345 million yuan, an increase of 2.97% over the previous year. The company's operating performance is mainly based on investment income, which increased by about 100% to 24.8 million yuan over the previous year. The main business had no advantage in extension.
The competitive environment is fierce, and internal audits are longer and limited: in the face of increasingly fierce market competition, after the three major shopping malls have completed scale expansion and hardware upgrades, there is an urgent need to further improve their operating capacity; Ginza shopping malls need to make great efforts to adjust their business layout, enrich their business formats, enrich mature and well-known brands, and tap their potential as soon as possible. At the same time, it is necessary to avoid internal friction caused by homogenized competition that affects the simultaneous release of performance.
In 2011, the company aims to achieve commercial revenue of 886 million yuan; ensure exhibition revenue of 64 million yuan. We are cautious about the company's future performance growth. The company's room for extended growth is limited, endogenous growth has reached a bottleneck period, and there are not many advantages in improving future performance. Coupled with the fierce competitive environment in the Wuhan region, the company's future market share may be compressed.
Profit forecast and investment rating: The company is expected to achieve earnings of 0.11 yuan, 0.17 yuan and 0.29 yuan per share in 2012-2014, respectively. Based on the closing price of 5.55 yuan on March 29, the corresponding dynamic price-earnings ratios are 62 times, 50 times, and 19 times, respectively. The company's “neutral” investment rating is still maintained.
Risk warning: The impact of a fierce competitive environment on company performance.
