Matters: the company issued a performance forecast, operating income in 2016 was 2.034 billion yuan, up 119.69% over the same period last year; operating profit was 478 million yuan, up 56.38% over the same period last year; net profit attributable to 390 million yuan, up 46.47% over the same period last year; and basic earnings per share was 0.52 yuan. By the end of December 2016, the company's total assets were 2.289 billion yuan, an increase of 143.14% over the beginning of the period, and the equity of shareholders belonging to listed companies was 971 million yuan, an increase of 59.24% over the beginning of the period.
16Q4 achieved high revenue and performance growth. The company's operating income of 2.034 billion yuan in 2016 increased by 119.69 percent over the same period last year, an increase of 63.5 percent over the previous three quarters, and the net profit attributable to 390 million yuan increased by 46.47 percent over the same period last year, an increase of 40.44 percent over the previous three quarters, exceeding the performance commitment of the company when it went public through backdoor listing (361 million yuan). Among them, the company's 2016Q4 single-quarter revenue increased by 225.67% compared with the same period last year, and the attributable net profit was 216 million yuan, up 110.81% from the same period last year. We expect that the significant increase in revenue and performance of the company is mainly due to 1) the smooth development of metal roofing and photovoltaic EPC business, and 2) the acquisition of Shenzhen Sanyi for the whole year. If Shenzhen Sanyi is excluded (assuming it is calculated according to the promised net profit of 18 million), the company will achieve a net profit of 372 million yuan in 2016.
At the beginning of the new year, we won a big order for the airport, or benefited from the peak of airport construction during the 13th five-year Plan. After Guangzhou Baiyun Airport, Xinzheng International Airport and Kunming Changshui Airport, in February 2017, the company successfully won the bid for part of the tender section of Beijing New Airport, one of the "seven newest super factories in the world", with a sum of 213 million yuan. Once again highlight the company's industry position and competitiveness as a leading domestic metal enclosure company. According to the 13th five-year Plan for the Development of China's Civil Aviation issued by the Civil Aviation Administration of China, during the 13th five-year Plan period, the country will continue to build 30 airports, build 44 new airports, renovate and expand 139 airports, and relocate 19 airports (218 domestic civil aviation airports in 2016). The airport ushered in a new round of investment peak will promote the construction of important supporting facilities-terminals. So as to bring new development space to the company's airport metal roofing business.
The layout of Belt and Road Initiative is worth looking forward to. The company has undertaken the construction contract of the Metro bus project in Multan, Pakistan, and has certain overseas business development and construction experience; at the end of 2015, the company acquired Sanyi in Shenzhen horizontally, further strengthening the competitiveness of the main industry of metal roof enclosure, and further expanding the market area to Southeast Asia, Central Asia, Australia and other regions; in 2017, in order to further promote the development of overseas projects, Shenzhen Sanyi set up a Malaysian subsidiary. We believe that under the background of the government promoting the "Belt and Road Initiative" strategy to gradually blossom and bear fruit, the development and growth of the company's overseas business is worth looking forward to.
Performance forecast and valuation. The company is a leading company specializing in the subdivision of metal roofing business, and the capital bottleneck has been alleviated and ushered in a period of rapid development after listing; metal roofing is mainly used in public buildings and commercial buildings, which is expected to benefit from the continuous increase in the proportion of domestic prefabricated buildings. We estimate that the EPS of the company from 2017 to 2018 is 0.70 yuan and 0.85 yuan respectively, giving a 17-year valuation of 30-35 times, a reasonable value range of 20.94 yuan-24.42 yuan, and a "overweight" rating.
Risk hint. Economic downturn risk, new business development is not as expected risk, payback risk.