Main points of investment:
Revenue fell by 7.95% in the third quarter of 2016, and net profit fell by 10.54%, in line with our expectations. In the third quarter of 2016, the company achieved operating income of 693 million yuan, down 7.95% from the same period last year, and realized a net profit of 92.9126 million yuan, down 10.54% from the same period last year, in line with our expectations. The decline in operating income in the first three quarters of the company was mainly due to the decline in revenue from department stores caused by the recession in retail business and the partial impact of the G20 on passenger flow. In addition, due to the decline in sales in department stores, the company received less government compensation. Revenue from financial management and trust products purchased by the company decreased by 3.03 million yuan in the first three quarters compared with the same period last year, which also had a partial impact on the slight decline in the company's performance in the first three quarters compared with the same period last year.
The transformation of medical services should be carried out cautiously, and the prospect of the transformation of medical services of the company should be optimistic.
We are optimistic about the prospect of the transformation of the company's medical services, and the company is actively promoting hospital location, but so far it has not been fully determined. We believe that the company is the target with the highest degree of transformation in the retail industry, mainly for two reasons. First, the resources obtained by the company's transformation are very scarce, and it has won the license of the only private for-profit tertiary hospital in Zhejiang Province. use this as a starting point to realize the transformation to medical services. Second, the actual controller of the company is steady and steady, and the operation and management effect of other business except listed companies is good, and it can continue to exceed the growth of its peers in the face of the industry recession. Xizi International Precision treatment Center, which the company cooperated with Zhejiang Cancer Hospital, was originally scheduled to open at the end of 2016, but now the progress has slowed down due to government approval, and the company is currently actively selecting a site. In addition, the company's 20% stake in the International Health and Medical Management Center has signed a strategic cooperation framework with run run Shaw Hospital affiliated to the Medical College of Zhejiang University, defining its positioning, business model and main business sectors. after completion, the full-process health management and medical services will be carried out on a membership basis. We believe that the acceleration of the landing of the company's oncology treatment center and the completion of the management center are of great significance to the company's transformation of medical health and provide a major catalyst for the rise of the company's stock price.
Maintain the company's profit forecast and maintain its "buy" rating.
Maintain earnings forecasts and maintain "buy" ratings. We maintain the company's profit forecast and estimate that the operating income from 2016 to 2018 will be 11.75 yuan 12.29 / 1.536 billion yuan, and the net profit of returning home will be 1.48 yuan 1.55 / 148 million yuan respectively. The net profit of the company's traditional business in 2016 is expected to be 148 million yuan, we give the traditional business 20 times PE corresponding to a reasonable market value of 2.96 billion yuan, tumor hospital 800beds, it is estimated that the annual income of each bed will achieve 1.5 million yuan in 2020, the annual income will achieve 1.2 billion yuan, according to the net interest rate of 25%, it can achieve a net profit of 300 million yuan, and the reasonable market value calculated by 10 times the net profit of PE in 2020 is 3 billion yuan. We conservatively calculate that the reasonable market capitalization of the company is 5.96 billion yuan, maintaining the "buy" rating.