Main points of investment:
Event: the company released its 2016 annual report on the evening of March 28, 2017. The company realized operating income of 1.606 billion yuan (YOY 34.16%) and net profit belonging to the parent company of 144 million yuan (YOY159.92%). In addition, the company plans to pay a dividend of 0.50 yuan (including tax) for every 10 shares, and increase 20 shares for every 10 shares to all shareholders with the capital reserve.
The completion of the gold shipping table, the performance increased significantly compared with the same period last year. In 2016, mainly due to the completion of the acquisition and merger of Golden Shipping, the company's revenue increased by 34.16% compared with the same period last year. As the gross profit margin increased by 5.45% over the previous year, the gross profit increased by 176.46% over the same period last year. The company's three fees increased by 12.20% over the previous year, non-operating profit increased by 84.27% over the previous year, and total profit and home net profit increased by 165.02% and 159.92% respectively over the same period last year.
Formally enter the field of defense equipment, set up an industrial park to increase the integration of the army and the people. In the first half of 2016, the company completed the acquisition and merger of Golden Shipping, and officially entered the defense field. The company realized 228 million of the business income of high-performance polymer and sea and air equipment products, accounting for about 15% of the total revenue. The gross profit margin of the product is as high as 58.02%, contributing nearly 50% of the gross profit. At the same time, the company plans to invest in the national Taizhou Pharmaceutical High-tech Zone to set up the first demonstration military-civilian integration science and technology industrial park in China, to form a comprehensive industrial platform guided by military-civilian integrated development and an industrial incubation platform integrated with production, learning, research and application, so as to further enhance the layout of military-civilian integration industry.
Natural gas business continues to advance, revenue has been greatly increased. The company's natural gas business completed revenue of 599 million in 2016, an increase of 34.93% over the same period last year, mainly due to the active development of clean energy application market, as well as governments at all levels in the Yangtze River Delta region to strengthen haze regulation and adjust the structure of the energy industry. In addition, the company and CNOOC Zhejiang Natural Gas Utilization Co., Ltd. are planning a joint venture to establish "CNOOC (Shanghai) Jiahao New Energy Co., Ltd." the joint venture company will make full use of CNOOC's brand advantages, platform resource advantages, management advantages and management advantages to integrate and manage the company's clean energy business to ensure the sustained and healthy development of the company's clean energy business sector.
The marine engineering business will expand in the direction of high added value and actively explore into the field of military auxiliary ships. Affected by the downturn in the global shipbuilding market, the company's ship design business completed revenue of 87 million in 2016, down 34.08% from the same period last year. For EPC, the company reported revenue of 607 million, up 12.83% from a year earlier. At present, the company is actively strengthening the transformation of the business to high value-added ships, focusing on the use of clean energy on ships and market opportunities in the field of deep-sea marine equipment. In addition, relying on the strength and qualification of Jin Shipping, the company explores and enters the research and development field of military auxiliary ships at the right time, creating a defense equipment industry chain based on the sea and giving consideration to the sky and underwater, so as to enhance the overall profitability of the company.
Profit forecast and investment advice. It is estimated that the EPS in 2017-19 will be 0.56,0.73,0.92 yuan respectively. Combined with the average PE of comparable companies in 2017 and the valuation premium of military business, the company will be given 54 times PE in 2017, corresponding to the target price of 30.24 yuan, with a "buy" rating.