Matters: the company released its annual report in 2016, with operating income of 2.193 billion yuan, an increase of 15.59% over the same period last year, a net profit of 93 million yuan belonging to shareholders of listed companies, an increase of 47.07% over the same period last year, and an EPS of 0.13 yuan, an increase of 44.44% over the same period last year. A cash dividend of 0.5 yuan (including tax) shall be distributed to all shareholders for every 10 shares, no bonus shares will be given, and no accumulation fund will be used to increase share capital.
The operating income increased steadily and the expense control ability was outstanding: in 2016, the company realized operating income of 2.193 billion yuan, an increase of 15.59% over the same period last year; the net profit belonging to listed shareholders was 93 million yuan, an increase of 47.07% over the same period last year; and the gross profit margin was 13.18%, down 2.35% from the previous year.
The company's business income increased steadily in 2016, mainly due to the landing of large-scale projects such as the wind shelter Anchorage construction project and supporting project (BT) of Xiangshan Port in Fenghua City, and the landing of large-scale projects such as Guoju Phase II Reclamation Project of Liuheng Xiao Guo Ju Project in Zhoushan City, which made the company's seawall engineering business increase by 35.21% this year. The company's gross profit margin has dropped by 2.35 percentage points this year, but its net profit has grown rapidly. The combined ratio of our total gross profit margin and the additional operating tax to revenue is 13.97%, which is 4.75% higher than that in 2015. We judge it as the impact of the implementation of the policy of business change in 2016.
The company's 2016Q1-Q4 achieved year-on-year growth of 23.81%,-15.22%, 23.27% and 32.05% respectively, and net profit belonging to listed shareholders increased by-47.24%, 24.16%, 212.90% and 49.56% respectively. As the second half of the year is the peak period for project revenue recognition, the company's revenue and net profit growth rate is significantly accelerated. The net cash flow generated by the company's operating activities during the reporting period was 34 million yuan, a decrease of 63.99% over the same period last year, mainly due to the increase in the amount of business tax paid by the company over the previous year.
PPP has a strong ability to take orders, and the performance release is guaranteed: the company's traditional main business orders are abundant. So far in 2016, the company has announced a total of 15.89 billion yuan in major orders, of which PPP orders 15 billion yuan, accounting for 95.61%. As a professional seawall engineering company, the company has actively formulated market expansion plans, and has established strategic partnerships with more than a dozen central enterprises, state-owned enterprises and listed companies. PPP has strong ability to take orders, and the landing of bid-winning orders one after another will be conducive to the release of follow-up performance; the company has also set up an investment construction management department to establish and improve supporting systems and methods for investment project management, and it is expected that more high-quality projects will be accelerated in the later stage. At the same time, compared with EPC construction general contract, PPP order has the characteristics of higher gross profit margin and larger amount of investment, which is expected to continue to improve the company's profit margin.
Cross-border transformation of the cultural and entertainment industry, the dual-main business pattern is becoming more and more perfect: in order to optimize the profit model, the company formulated the "double-main business" business strategy in 2016, set up the second main business department, and planned to lay out the cultural and entertainment industry. The company invested in the establishment of Beijing Orange Le Xin Entertainment Media Co., Ltd. (later known as "Orange Le Xin Entertainment") as the core platform for the layout of cultural entertainment industry. At the same time, the acquisition of 41% stake in Beijing Juguang Picture Technology Co., Ltd. has taken a solid step in epitaxial mergers and acquisitions.
In 2016, Orange Le Xinyu invested 17.5 million yuan with Oneness Film Co., Ltd. to invest in the film Blood of machines, which is starring Jackie Chan and directed by Zhang Lijia and is expected to be released by the end of 2017. Yue Xiaomei, the shareholder of Orange Lexin Entertainment's first natural person, is an experienced filmmaker with rich experience in cinema management and investment and operation of film and television projects. it is expected that the company will have the opportunity to invest in more high-quality film and television works and increase the flexibility of the company's performance.
Investment advice: buy-An investment rating, 6-month target price of 11.04 yuan. The company is a leading enterprise in the construction of seawall projects. The traditional main business has sufficient orders on hand to ensure steady growth in performance. In 2016, the company put forward the strategy of "dual main business" experience, laid out the cultural and entertainment industry, and took a solid step in extension mergers and acquisitions. We are optimistic about the company's "dual main business" layout in the future. The company's revenue growth from 2017 to 2019 is expected to be 68.0%, 31.0% and 30.0%, respectively, and net profit growth is 153.8%, 40.6% and 31.0%, respectively. Temporarily maintain the company's buy-An investment rating, with a six-month target price of 11.04 yuan, equivalent to a dynamic price-to-earnings ratio of 48 in 2017.
Risk hint: the landing of the order is not as expected, the double main business is not as expected, and the progress of the project is not as expected.
