Summary of the report:
Performance summary: in 2016, the company achieved operating income of 1.37 billion yuan, an increase of 27.08% over the same period last year, and the net profit attributable to shareholders was 41.59 million yuan, an increase of 325.74% over the same period last year.
Aike Semiconductor also made a turnaround, and the building materials business was a drag on performance. During the reporting period, the company turned from loss to profit, mainly as follows: 1, the company spun off Dacheng New Energy, which has been losing money all the year round in the second half of 2015; 2, in June 2016, the company began to consolidate its acquired Aike Semiconductor with a net profit of 89.9 million yuan, which greatly improved the company's operating performance. However, affected by the inventory of commercial housing in Zhenjiang area, delayed construction and intensified competition in the building materials market, subsidiary Hong Kong and New Materials and China Technology New Materials lost 68.81 million yuan and 29.15 million yuan respectively, eroding the company's performance. With the recovery of real estate in Zhenjiang area and the comprehensive consolidation of Aike Semiconductor, the company's net profit is expected to increase step by step.
2077 Project sales and semiconductor testing have a high gross profit margin, with a year-on-year increase of 3 percentage points. In 2016, the company's overall gross profit margin was 22.97%, an increase of 3.00% over the same period last year. Although the gross profit margin of the trade and logistics business accounted for a high proportion of revenue, and the gross profit margin fell 4.6% from the same period last year, which was a drag on the overall gross profit margin, 2077 real estate projects formed sales. and the market position is relatively high, and the real estate business gross profit margin increased 6.83% year-on-year to 27.71%. In addition, the integrated circuit testing business of Aiko Semiconductor has high added value, with a gross profit margin as high as 63.44%.
Aike Semiconductor has high growth, and the path of transforming high-tech industry is clear. Aike Semiconductor, wholly acquired by the company, is a high-quality semiconductor testing company, benefiting from the continued high growth of domestic semiconductor demand and the transfer of the global semiconductor manufacturing industry to China, the semiconductor testing industry continues to improve. The company is determined to transform the high-tech industry and has a clear path. On the one hand, it will continue to sort out inefficient assets, on the other hand, it will continue to expand the layout of the high-tech industry with Aike and Zhongke as the starting point. We are optimistic about the development of the company in the integrated circuit industry chain and laser processing application field.
Profit forecast and rating: the growth rate of net profit in 2017-2019 is expected to be 299% and 21% respectively. The EPS is 0.29% 0.35 yuan and 0.42 yuan respectively.
Risk hint: the real estate market in Zhenjiang is in the doldrums, and the development of Aike Semiconductor is not as expected.