The company's performance is basically in line with our expectations, and investment income is the main factor for the company's profit growth in 2007. In 2007, the company's main business profit loss was 58.19 million yuan, investment income was 579.3864 million yuan, and operating profit was 521.1968 million yuan.
The company's investment income mainly comes from the income of Bohai Securities and the income from the sale of Teda Chengkai. The income from equity transfer and equity investment were 238.8269 million yuan and 261.497 million yuan respectively, accounting for 86.35% of the investment income. The magnificent demeanor of the securities market in 2007 made a great contribution to the company's performance.
The profit and loss of the company's main business is mainly due to the substantial increase in operating expenses and financial expenses. When the operating income increased by 13.61%, the company's operating expenses and financial expenses reached 118.6781 million yuan and 133.3568 million yuan respectively, an increase of 47.38% and 62.66% respectively over the same period last year. ① affects the growth of operating expenses of the company more temporarily, such as the provision for bad debts and the disposal of coastal bridges and greening assets, which lead to the increase of management costs. ② as Teda Chengkai has been sold, the company's financial cost pressure in 2008 is relatively reduced, but the current construction project will still maintain a relatively strong capital demand.
Regional development is still worthy of attention. In 2007, the company's 11 square kilometers of Yangzhou Guangling New City has completed the key procedures in the early stage of construction, and the preparatory work for the 540 mu Qingchengshan project in Dujiangyan, Chengdu has been carried out. We believe that the success of Nanjing New Town's Nanjing Toroga project is conducive to the smooth progress of the above two projects. We will pay further attention to the time of its contribution to profits.
The fluctuation of the securities market in 2008 has a negative impact on the company's profits. We reduce the assumption of the average daily trading volume of the securities market in 2008 to 160 billion yuan, so we reduce the net profit of Bohai Securities in 2008 and 2009 to 855 million yuan and 753 million yuan.
The 297.45 million shares held by the company's major shareholder, Teda Group, will be listed and circulated on December 9, 2008, when the company will become a full circulation company. As the Teda group holds only 33.75% of the shares, there is little selling pressure from a long-term perspective of controlling shares.
Due to the fluctuation of the securities market, according to the principle of prudence, we adjusted the company's EPS to 0.35,0.51 and 0.47 yuan in 2008, 2009 and 2010, and lowered the valuation center to 18.22 yuan, giving a short-term "neutral" and long-term "recommended" investment rating.