Events. The company publishes its 2016 annual report. During the reporting period, the company realized operating income of 6.08 billion yuan, an increase of 40.5% over the same period last year; net profit belonging to shareholders of listed companies was 372 million yuan, an increase of 37.2% over the same period last year; and basic earnings per share was 0.35 yuan. The company intends to pay a cash dividend of 1.07 yuan (including tax) to all shareholders for every 10 shares.
In 2008, driven by indemnificatory apartment and the increase in commercial housing sales, the company's revenue increased by 40.5%, and the company's net profit increased by 37.2% during the reporting period. In 2016, the urban construction sector of the company added kilometers of roads, 2.28km of river courses, 2.2km of river embankments, 191.53 hectares of new green area and 17.35ha of parks; the total construction area of affordable housing, commercial housing and public infrastructure projects has reached 970500 square meters. Among them, the company's commercial housing Suzhou Lanting Peninsula Life Square (Suzhou Dushu Lake Moon Bay Project) has been fully completed. The construction of area An and B of block 01 in Wanhe city of Lvdu has been completed, and the project of block 02 has started. In 2016, the company invested in Lamborg Seal Technology through a subsidiary of Zhonghe Investment; the US kateeva project invested through Yixing Fund is in preparation for listing; Changshu Auto Decoration was approved by the Securities Regulatory Commission on January 9, 2016 and listed on January 5, 2017 on the Shanghai Stock Exchange.
In June 2000, the company increased its capital to Black Peony (Hong Kong) Development Company by 440 million yuan, and set up a wholly owned subsidiary Peony Xinlong Company at the same time. In July 2016, the company invested 240 million yuan to jointly establish Changzhou Local legal person Life Insurance Company. In September 2016, the company plans to increase the capital of Black Peony Development (Hong Kong) Co., Ltd. by 230 million yuan. In October 2016, the company signed the second phase of key infrastructure PPP project in Xinbei District of Changzhou City from 2015 to 2016. In November 2016, the company's subsidiary Black Peony Construction signed a 1.7 billion yuan PPP project franchise agreement. In April 2017, the company issued the outline of the development plan for 2017-2020. The company will create an industrial holding group with obvious core competitive advantages. On the one hand, continue to improve the existing business sector of the industrial chain, so that the company's performance to maintain sustained and steady growth; on the other hand, the introduction of high-quality projects in line with the company's strategic layout, thickening the company's profitability, the layout of the new industrial sector.
Investment advice. Set textile and clothing, urban comprehensive development, industrial investment as one, to maintain the "holding" rating.
On behalf of the government, the company is carrying out full-service deep ploughing and development of the New North District; the 17.5sq km high-speed rail area and Wanqiang fertile land project during the first phase of construction are progressing smoothly, and the second phase of land development is under way. According to the contract, the company will receive 10% of the project income and 5:5 share of the income. The New North District of Changzhou, which has a low price-to-income ratio and covers an area of square kilometers, has only developed 1x5, and there is room for expansion in the future. The company promotes textile and clothing to rejuvenate through brand strategy (self-created jeans ERQ brand), and the company's industrial investment is steadily expanding. Therefore, we estimate that the company's EPS in 2017 and 2018 is 0.44 yuan and 0.59 yuan respectively, and the corresponding RNAV is yuan. Taking into account the company's fund-raising to enhance the staying power of development, we take the company's RNAV, that is, 11.1 yuan as the company's target price for the next 6 months, to maintain the "overweight" rating.
Risk hint: the industry faces two major risks: interest rate hike and policy regulation.
