incident. The company published its 2017 quarterly report. During the reporting period, the company achieved operating income of 263 million yuan, an increase of 98.9% over the previous year; net profit attributable to shareholders of listed companies was 1.09 million yuan, an increase of 30.1% over the previous year; and achieved basic earnings of 0.03 yuan per share.
In the first quarter of 2017, driven by increased trade and real estate sales, the company's revenue increased by 98.9%; affected by lower gross settlement margin, the company's net profit growth narrowed to 30.1%. In the first quarter of 2017, the company's settlement revenue increased (trade business revenue increased 60 million yuan, real estate sales revenue increased 70 million yuan), which enabled the company to achieve operating income of 263 million yuan during the reporting period, an increase of 98.9% over the previous year. Due to low settlement gross margin, the company achieved net profit of 1.09 million yuan, an increase of 30.1% over the previous year.
Investment advice. Benefiting from Chongming's removal of counties and the establishment of districts, the “increase in holdings” rating was maintained when the transformation was carried out. The company has developed in multiple industries and has always been the only listed company on Chongming Island. Currently, the company's main business has not been clarified; for the time being, it is mainly engaged in real estate development business. Since the 90s, the company has tested ecological agriculture, high-tech agriculture and tourism, etc., and has a total of 2,500 acres of land used 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 type of island bringing together international conferences, vacations and leisure, science, education, research and innovation, and new towns. The company will fully benefit after Chongming is removed from the county and established.
Currently, the company has more than 20 participating and shareholding subsidiaries, including investment promotion, industrial operation, asset management and proprietary investment. The company's EPS in 2017 and 2018 is expected to be 0.19 yuan and 0.30 yuan respectively.
Referring to the comparable company Pingtan Development's price-earnings ratio of 110 times in 2017, we gave Yatong Co., Ltd. a price-earnings ratio of 90 times in 2017, with a target price of 17.1 yuan, maintaining the “increase in holdings” rating.
Risk warning: The industry faces two major risks: interest rate hikes and policy regulation.
