Main points of investment

Event: Australian Science and Technology released its annual report in 2016. during the reporting period, operating income reached 4.876 billion yuan, up 28.02% over the same period last year. Operating profit reached 239 million yuan, up 240.63% over the same period last year. Net profit attributed to shareholders of listed companies was 259 million yuan, up 90.81% over the same period last year. Basic earnings per share reached 0.38 yuan, an increase of 90.00%.

In the fourth quarter, the company achieved operating income of 1.4 billion yuan, an increase of 38.14% over the same period last year, an operating profit of 44 million yuan, an increase of 44.77% over the same period last year, and a net profit of 59 million yuan belonging to listed shareholders, an increase of 30.29% over the same period last year. Equivalent to single-quarter EPS0.08 yuan.

The company also expects a net profit of 44 million yuan to 60 million yuan in the first quarter of 2017, an increase of 33.16% Murray 81.58% over the same period last year.

Maintain the "overweight" rating. The performance of Aoyang Technology in 2016 was basically in line with our previous predictions. during the reporting period, the volume and price of viscose staple fibers rose, the pharmaceutical circulation and medical services business developed steadily, while the company's expense rate decreased significantly, which was the main reason for the company's substantial growth.

Aoyang Science and Technology is one of the leaders of viscose staple fiber, with a production capacity of 300000 tons of viscose staple fiber, and plans to invest in the construction of 160,000 tons / year differential viscose project, the supply and demand pattern of viscose staple fiber is improved, the industry boom continues to be upward, and the performance is elastic. During the reporting period, the company's pharmaceutical circulation business developed steadily, four general hospitals of the company have been put into operation, 2200 beds have been opened, and the contribution performance of medical and health business has increased steadily. In addition, there is a huge space for future development in the field of medical rehabilitation gradually entering. At present, preparations have been made to build three rehabilitation hospitals. We estimate that the company's EPS in 2017 will be 0.62,0.68,0.76 yuan respectively in 2019, maintaining the "overweight" rating.

Risk hint: the downstream demand of viscose staple fiber decreased, and the expansion of medical and health business was not as expected.