Main points of investment:
Events. The company publishes its 2016 annual report. During the reporting period, the company realized operating income of 925 million yuan, a year-on-year increase of 76.9%; net profit belonging to shareholders of listed companies was 47.12 million yuan, an increase of 14.3% over the same period last year; and basic earnings per share was 0.13 yuan.
In 2016, driven by property carry-over and increased trade, the company's revenue increased by 77%, while the increase in property profits and income from the disposal of cowshed assets increased net profit by 14%. By the end of 2016, the "Jianghai Mingdu" project developed by Shanghai Yatong Harmony Investment and Development Co., Ltd., a subsidiary of the company, had been settled. By the end of 2016, all the commercial houses of the "Jianghai Mingdu" project had been sold out and some garages were still on sale. At the end of 2016, Shanghai Yatong Harmony Investment and Development Co., Ltd., a holding subsidiary of Shanghai Yatong Harmony Investment and Development Co., Ltd. transferred a 90% stake in Shanghai Tongying Hongming Real Estate Development Co., Ltd., the "Chengqiao Town Commercial Housing No. 1 (Yatong-Waterfront Jingyuan)" can sell 720 units, all sold out, the shop has sold 6 sets, withdrew 1.316 billion yuan, and began to hand in the house at the end of September. In 2016, the company optimized the real estate project of "Chengqiao Town Commercial Housing No. 2". In 2016, the company's "Zhongjinqiao Road Land (Yulin Mansion)" project can sell 404 houses, all of which have been sold out, the relocation shops have been repurchased, and the sales income has reached 922 million yuan, and the house has been handed in since October. In 2016, Shanghai Junkai International Travel Service Co., Ltd., a third-tier subsidiary of the company, introduced a new shareholder, Shanghai Xiangchuan Network Technology Co., Ltd., to jointly develop air ticket agents and Shanghai tourism market.
In June 2016, the company jointly initiated the establishment of Ningbo Meishan Free Trade Port Tongyi Investment Management Partnership (Limited Partnership). In August 2016, the company cooperated to establish Shanghai Tongxin Medical Management Co., Ltd. In June 2016, the company added 50,000 square meters of land reserve rights and interests.
Investment advice. Benefit from the withdrawal of Chongming county into districts, when the transformation is carried out, maintain the "holding" rating. The company has diversified development and has always been the only listed company on Chongming Island. At present, the company's main business is not clear, temporarily mainly engaged in real estate development business. Since the 1990s, the company has been experimenting with ecological agriculture, high-tech agriculture and tourism, and has a total of 2500 mu of land for ecological agriculture. The development of Chongming Island is positioned as a modern ecological island. It is planned that by 2020, Chongming Island will gradually improve the development and construction of various regions and become a new island with the collection of international conferences, vacation and leisure, scientific and educational research and innovation, and new towns. Chongming will fully benefit from the withdrawal of counties and the establishment of districts.
At present, the company has more than 20 shareholding subsidiaries, including investment, industrial operation, asset management and self-investment. It is estimated that the EPS of the company in 2017 and 2018 is 0.19 yuan and 0.30 yuan respectively.
With reference to the comparable company Zhongfu Strait (Pingtan) with a price-to-earnings ratio of 127 times 2017, we give Yatong shares a price ratio of 105 times earnings in 2017 with a target price of 19.95 yuan.
Risk hint: the industry is facing the risk of raising interest rates and policy regulation.