Main points of investment
Event
The company announced a pre-increase in 2016 results last night. According to preliminary estimates by the financial department, the net profit attributed to shareholders of listed companies in 2016 is expected to increase by 250% compared with the same period last year. The net profit attributed to the listed company in 2015 is 73.41 million yuan. Based on this, the company is expected to achieve a net profit of RMB257-315 million in 2016, with a substantial increase in performance, which is basically in line with our previous profit forecast.
Substantial pre-increase in performance, substantial growth in health care, real estate settlement and convergence of investment income
The substantial increase in the company's performance this year is mainly due to three aspects: first, the revenue of the medical sector with integrated health care as the main body has increased significantly. In 2015, the company signed contracts and operated medical cooperation into 28 projects. Four new oncology treatment centers and two hospitals were signed in 2016, and the total number of contracts and operating projects has reached 34. The second is the completion and settlement of some real estate projects under construction. The remaining real estate projects of listed companies are mainly concentrated in Zhuhai and Shenzhen, and house prices have increased greatly since the beginning of this year. The third is the investment income from the sale of subsidiaries, which sold 100% of Qianjiang Zhongzhu in December. Yangjiang Haohui 100% and Chenzhou Gaoshi Weiye 51% of the three subsidiaries, the company received a pre-tax income of about 79 million yuan, which had a positive impact on the current performance.
Divestiture of non-core business and structural adjustment of operation continue to be on the way
The company's business strategy transformation medical health industry has a firm determination and strong executive power. From the end of 2015 to the present, four subsidiaries of building materials, real estate marketing, landscaping and decoration engineering have been transferred successively, as well as the divestiture of the company's 70% stake in Hongrun Feng Coal Industry at the beginning of this year, and the sale of 100% of Qianjiang Zhongzhu in early December. Yangjiang Haohui 100% and Chenzhou Gaoshi Weiye 51% of the real estate business subsidiaries to the major shareholder Zhongzhu Group, etc., gradually divest the non-core business and realize the exchange of the balance sheet. In terms of the layout of the medical health industry, in 2016, on the basis of the successful completion of the major asset restructuring and merger of Shenzhen Integrated Medical Technology Co., Ltd., the company continued to increase the size of the medical health industry in line with market changes, successively led the private tertiary general hospital Harbin Jiarun Hospital to build a tumor radiotherapy center, and spent 150 million yuan to acquire the new drug project of SCM-198 of Fudan University. And bought 65% of the shares in the hospital of Lu'an Development Zone with a total price of 36.86 million yuan. The company continues to spin off non-core business, operating structural adjustment on the way.
Profit is basically in line with expectations, the pullback brings low suction opportunities PE 61x45x41X $24.54, corresponding to yesterday's closing price of EPS0.40/0.54/ 0,000,000 yuan, or 3.8ppm per 2.86pm, the company's net profit is forecast for 2018-year 2016 for this year's performance, and RMB286m is used as the median profit forecast. Basically in line with our profit forecast of 100 million yuan, 286 median hundreds of millions of yuan, 3.15-2.57 years performance forecast to achieve a net profit of 2016 companies. Yuan EPS0.39/0.54/0.60 per share is 100 million yuan, equivalent to 2.8 billion yuan per share, equivalent to 2.8 million yuan per share, with a net profit of 14.2 million EPS0.39/0.54/0.60 20.8 revenue year. In our research report in November (see "related research" in the left column for details), we forecast that by the end of yesterday's trading of the company 2016-2018, the overall PE (TTM) of the medical device (SW) industry as a whole was 63 times, while that of comparable company Xinghe Biological PE (consistent forecast in 2016) was about 98 times. The company's current price corresponds to 2016PE 61 considering the company's non-public offering financing of 1.3 billion yuan and future real estate to provide sufficient cash flow for the development of the medical sector. We maintain the target price of 37 yuan in the next 12 months.
Risk hint
The expansion speed of tumor center is lower than expected, and there is a risk of integrated medical integration.