The performance is in line with expectations and the "overweight" rating is maintained. The company's 2015 revenue was 820 million yuan, down-17% from the same period last year; its net profit was 6.88 million yuan, up 207% from the same period last year. The company's profits increased sharply in the fourth quarter of 15 years due to the disposal of idle real estate. Taking into account the improvement of the company's financial situation after the fixed increase, it is expected that the financial control transformation will accelerate, maintaining the company's 2016-2018 EPS of 0.09 and 0.13 respectively, raising the target price to 35.68 yuan, and maintaining the "overweight" rating.
The profitability of traditional business is still declining, and transformational finance is expected to be more determined: the company's traditional enamelled wire business is still in the leading position, but revenue is still negative 17 per cent due to the decline in economic growth. It is expected that the decline in the profitability of traditional business will accelerate the company's progress and determination to transform finance.
Acquire Hengqin International Commodity Trading Center and create an OTC spot Trading Center with domestic characteristics. (1) there is a lot of room for the industry. As part of the futures business has not been launched, the current industry pricing hedging demand is difficult to meet, the company through the acquisition of commodity trading centers, through spot non-standardized contracts to replace the relevant demand, broad prospects for future development. (2) strong profitability. Judging from overseas commodity exchanges such as CME for profit, after the platform is built, with the massive volume of transactions and light asset model, the related platform ROE can reach 30% and 40%.
Diversified financial licenses can be expected to continue to benefit from the policy catalysis of Hengqin Free Trade Zone. (1) it is expected that the company will obtain the joint venture securities business license is a high probability event, the financial transformation is already the established direction of the company, the possibility of other extension expansion will not be ruled out in the future. (2) the company is rooted in Zhuhai. With the establishment of the Hong Kong-Zhuhai-Macao Bridge, Hengqin will become the only area where the land bridge connects Hong Kong and Macao. The diversified preferential policies of the free trade zone will help the layout of the company's financial control platform.
Core risk: financial business layout progress is lower than expected
