The company achieved revenue of 371.76 billion yuan in the first three quarters of 16 years, an increase of 5.3% over the previous year, and net profit attributable to shareholders of listed companies was 52.119 million yuan, a year-on-year decrease of 21.4%, and EPS 0.076 yuan.
The decline in investment income led to a decline in performance: The decline in the company's net profit in the first three quarters was mainly revenue from the sale of financial assets and the reduction in dividends confirmed by Greenland Holdings in the first half of the year, which led to a 14.6% year-on-year decline in investment income. In the first half of the year, the company further optimized its investment project structure through the sale of Shanghai Junwei (Junwei Company had a net loss of 4.496 million yuan over 15 years, and the company made a profit of 1,244 yuan from the sale), laying the foundation for future development.
The funding situation is good, and the transformation requirements are clear: although the company was restructured twice in September of last year and July of this year, it also fully reflects the firm determination and urgent demand for the company's transformation. At the end of the reporting period, the company had 285 million yuan in cash on hand, and the balance ratio fell 1.6 percentage points from the end of 2015. There was zero interest-bearing debt. There is good potential for transformation. We are still looking forward to the company's subsequent transformation and expansion.
The continued increase in insurance capital holdings shows recognition of the company's value: Guohua Life Insurance listed the company from July to August last year, increasing its holdings by 15% to become the company's second largest shareholder, then increased its holdings by another 5% from September to early October this year, and plans to continue to increase its holdings by no less than 10 million shares (accounting for 1.46% of the total share capital) within the next 12 months. After considering this year's share delivery, according to our estimates, Guohua Life Insurance's shareholding cost is between 11.06-11.42 yuan. The company has received a continuous increase in insurance capital holdings since last year. On the one hand, it shows the insurance capital's recognition of the company's resource endowment. The total shares in the logistics park plot and green space in Minhang District are about 7.8 billion yuan; on the other hand, it also shows the insurance capital's recognition and expectations for the company's future transformation potential.
Profit forecast and investment rating: We expect the company's EPS in 16-17 to be 0.12 and 0.15 yuan respectively, maintaining the “increase in holdings” rating.