Main points of investment:
Return to the mother net profit increased by 322% over the same period last year, mainly due to the reduction of "Shangfeng cement", seamless steel pipe production has become the main revenue growth point. In 2016, the company's operating income was 879 million yuan, an increase of 9.28% over the same period last year; the net profit was 101 million yuan, an increase of 321.50% over the same period last year; and the non-net profit was-27 million yuan. Mainly in the reporting period to sell "Shangfeng cement" 13.76 million shares, achieving 154 million investment income. The company's main business gross profit has increased, mainly due to the improvement of seamless steel pipe business; however, due to the current asset restructuring to pay larger consulting fees, management fees increased by 59% year-on-year, deducting non-return net profit continued to lose. Of the main income, textile revenue reached 500 million (- 2.68%), gross profit margin 15.31% (reduced by nearly 1 percentage point), iron and steel revenue 360 million (+ 28%), gross profit margin 13.36% (increased by 8 percentage points). Sun Company Minghe Company is one of the largest seamless steel pipe production enterprises in East China, and it is the first enterprise and production base of large caliber medium and thick wall steel pipe in China, which is in a leading position in the industry. the price fluctuations of energy resources products such as oil and steel have a direct impact on the sales and profits of seamless steel tubes.
Big data Company Tai Yi refers to the completion of the transfer of ownership on December 27, 16, to speed up the transformation and development of the Internet. The company completes the 100% equity acquisition by issuing shares and cash (raising supporting funds of 240 million, and the subscriber only benefits Venture Capital as the actual controller of the listed company), with a transaction price of 1.2 billion. Big data, the original owner of the marketing business (DSP platform), has vigorously developed the high-margin marketing data analysis service business over the past 15 years, resulting in a significant increase in revenue and net profit; revenue in 13-15 years is 160 million, 240 million and 370 million respectively; gross profit is 29%, 34% and 35% respectively; return net profit is 9.82 million yuan, 14.58 million yuan and 27.42 million yuan; the growth rate in the revenue period from 2014 to 2015 is 48% and 55% respectively. Taiyi pointed out that the promised non-return net profit for 16-18 years was 55 million yuan, 85 million yuan and 122 million yuan respectively. In 2016, the actual deduction of non-attributable net profit was 61.5329 million yuan, completing 111.88% of this year's performance commitment. Considering the accounting installment assumption, the company's consolidated financial statements for the current period only include Taiyi's balance sheet, excluding its profit statement and cash flow statement.
The subsidiary intends to take a stake in the insurance company and diversify into the next city. Taiyi Zhi, a subsidiary, plans to join hands with Pacific property Insurance, Ningbo Industrial Investment Group and Tibet Financial Leasing to set up an investment guarantee insurance company in Ningbo National Insurance Innovation Comprehensive Experimental Zone to open up new areas of diversified operation. The registered capital of the insurance company is proposed to be 1 billion yuan, while Taiyi finger still plans to contribute 145 million yuan, accounting for 14.5% of the equity. At present, insurance companies have invested in commercial banks, microfinance companies and guarantee companies.
Profit forecast. The company's traditional seamless steel pipe business has returned to the high growth channel, and big data's business development will also step into the fast lane. It is estimated that the return net profit of the company in 2017 and 2018 is 167 million yuan and 201 million yuan respectively, and the corresponding EPS is 0.32 yuan and 0.38 yuan respectively. With reference to the average valuation of the company in the traditional business and big data industry, and considering the favorable policy of the company's traditional business to meet the "supply side" policy, and the high growth of big data's business, we give the company a buy rating of 52 times PE in 2017, corresponding to a target price of 16.64 yuan.
Risk hint. Taiyi refers to the risk that the performance growth rate is not as fast as expected; the downside risk of the company's traditional business.
