It is the only listing platform for state-owned holding groups, which mainly engages in the hydropower business. The largest shareholder of the company is Hunan Development Asset Management Group Co., Ltd., the actual controller is the Hunan Provincial People's Government, and the company is the only listed company under the controlling shareholder. It is mainly engaged in the hydropower business, and its main business is relatively stable.
The development prospects of the rehabilitation industry in the layout continue to improve. Rehabilitation projects will begin to be continuously included in medical insurance coverage, which will release demand for rehabilitation; breaking the use of medicine for medicine and implementing multi-point practice will show the value of rehabilitation medical treatment, increase the mobility of doctors' resources, and greatly ease the supply-side dilemma of rehabilitation personnel; medical insurance fee control and hierarchical diagnosis and treatment will improve the ecological environment for rehabilitation; and changes in the disease spectrum brought about by population aging will spawn rehabilitation demand.
The Xiangya Fraternity Rehabilitation Hospital combines the advantages of many parties to create a “Xiangya model.” By connecting with Xiangya Hospital and undertaking government purchases, the Xiangya Pok Oi Rehabilitation Hospital solved the problem of establishing an initial source of illness. It adopted an asset-light model of leasing some properties to quickly recover investment capital. The “Xiangya Model” has unique advantages.
The “Xiangya Model” is expected to be replicated throughout the province. The company plans to complete the layout of rehabilitation hospitals at the municipal level in mainland Hunan Province within 3-5 years. Director Zhou Jianglin's rehabilitation industry resources, good cooperation with general hospitals, and background resources of state-owned holdings make up the unique superior resources of the “Xiangya Model”, which is a strong guarantee for the successful promotion of the “Xiangya Model” throughout Hunan Province. The Xiangxi and Changde Pok Oi Rehabilitation Hospitals are expected to open within this year.
Profit forecasts and investment ratings. The company's main hydropower business operates steadily and has abundant cash flow. The environment in the rehabilitation medical industry continues to improve. Expectations of the scope of medical insurance payments are expanded, the rapid growth opportunities of the industry brought about by the hierarchical diagnosis and treatment of medical insurance fees and the aging of the population. The “Xiangya Model” of the Pok Oi Rehabilitation Hospital in Changsha has solved problems such as the origin of patients, and has adopted an asset-light model for some leased properties, and the recycling cycle is short. At the same time, the “Xiangya Model” is replicable. The company relied on Director Zhou Jianglin's industry resources+the company's state-owned holding background to cooperate well with general hospitals to form a strong guarantee for the successful promotion of the “Xiangya Model” in Hunan. Optimistic about the company's layout and development in the field of rehabilitation, we expect the company's EPS to be 0.35 yuan, 0.40 yuan, and 0.44 yuan respectively from 2015 to 2017. The corresponding price-earnings ratio estimates are 63 times, 55 times, and 50 times, respectively. For the first time, coverage gave the “Buy” level.
Risk warning: 1) The development of the rehabilitation medical industry fell short of expectations; 2) the rehabilitation hospital construction project fell short of expectations; 3) Continued cooperation with Xiangya Hospital is uncertain; 4) The performance of the hydropower business is uncertain; 5) The business model is not replicable.