Main points of investment:
Events: the company announced its annual report in 2017 and its quarterly report in 2016.
In 2016, the net profit attributed to the parent company increased by 41.04%. In 2016, the company completed operating income of 2.899 billion yuan, down 4.98% from the same period last year; the net profit of owners belonging to listed companies was 43 million yuan, realizing earnings per share of 0.03 yuan, an increase of 41.04% over the same period last year.
In the first quarter of 2017, the net profit attributed to the parent company increased by 34.82%. In the first quarter of 2017, the company completed operating income of 382 million yuan, an increase of 22.19% over the same period last year; the net profit of owners belonging to listed companies was 6 million yuan, with earnings per share of 0.0029 yuan, an increase of 34.82% over the same period last year.
Management change in place, and power construction real estate cooperation continues to move forward. The company began to cooperate with power construction real estate in 2012, first by the former major shareholder Xu Xiaoming transferred 29.75% of the shares formally introduced into power construction real estate. Since then, Dianjian Real Estate has officially become a controlling shareholder of 41% through an offer, and the company has officially become a platform of listed companies under the Central Electric Construction Real Estate through private enterprises. Since then, the two sides have had more cooperation in land acquisition and financing, and signed a "Memorandum of Cooperation" with Hubei Electric Power Construction No. 1 Engineering Company in Wuhan in April 2016. In May 2016, the company completed the change of the board of directors, with Xue Zhiyong, the party committee secretary of DCC Real Estate, as the chairman of the company, and the cooperation between the company and DMC Real Estate has taken a great step forward.
The company is gradually transforming the cultural and creative related industries. In addition to the cooperation with Hubei Electric Power Construction No. 1 Engineering Company in cultural and creative industries, on June 6, 2015, the company signed the Strategic Cooperation Framework Agreement with China-India Group Culture Co., Ltd. Chinese and Indian culture belongs to China Cultural Industry Development Group Corporation (hereinafter referred to as "China Wenfa Group") directly under the State-owned assets Supervision and Administration Commission of the State Council. It is the investment platform and strategic fulcrum for cultural and creative industries of China Wenfa Group, which mainly focuses on the development and operation of cultural and creative industrial parks and the investment of cultural enterprises. Focusing on cultural and creative industrial park + development and operation / exhibition / Internet / education and training, it is a professional service platform for cultural and creative industry consulting services, park operation and resource integration. The company will continue to increase the transformation of related industries in the future.
Investment suggestion: the company's earnings per share in 2017 and 2018 are expected to be 0.20 and 0.25yuan respectively. As of April 27, the company closed at 4.54 yuan, corresponding to 22.70 times PE in 2017 and 18.16 times PE in 2018. Taking into account the future growth of the company, give 2017 30 times the valuation of PE, corresponding to the target price of 6 yuan, maintain the "overweight" rating.
Risk hint. The recovery in the fundamentals of the industry fell short of expectations.