Events:

Shenzhen Zhenye A (0000060) today announced its 2016 results forecast that the net profit attributable to shareholders of listed companies in 2016 is expected to increase by 80% to 110% compared with the same period last year.

Comments:

The company expects to achieve net profits attributable to shareholders of listed companies of 750 million to 875 million in 2016, an increase of 80 to 110 per cent compared with the same period last year. For the whole year of 15 years, the net profit attributed to the shareholders of the listed company was 4.16 yuan. It is expected that the annual results of 16 years will achieve substantial growth, corresponding to earnings per share of about 0.55 yuan to 0.64 yuan. The company's current performance has improved significantly compared with the same period last year, mainly due to the company's confirmation of a large amount of investment income from the joint development project with Shenzhen Metro Group Co., Ltd.

Among them, the company's operating income in the first three quarters was 1.145 billion yuan, an increase of-50.3% over the same period last year; the net profit attributable to the company was 114 million yuan, an increase of-58.64% over the same period last year, and earnings per share was 0.084 yuan. The company's performance declined in the first three quarters, but Jinhui PARK, a joint development project between the company and Shenzhen Metro, will begin to achieve settlement income in 16 years, which will significantly boost the company's full-year performance for 16 years.

Overall, it is expected that the company's 16-year performance will achieve ideal growth, supporting the valuation increase. At the same time, the current layout of the urban location of the property market has a good prospect, relying on the internal resources of deep state-owned assets, as well as the strong background of state-owned enterprises, there are great advantages in project resources, funds and cost control. The company's state-owned enterprise reform is expected to be strong, and the accelerated development is worth looking forward to. The cooperation project with Shenzhen Metro has entered the settlement period, and its performance has been supported in the next two years. Raise the company's 16-year EPS to 0.58 yuan, corresponding to the previous share price PE of 17 times, maintaining the "recommended" rating.