Turning losses into profits in 2016, performance ushered in an upward inflection point
The company issued a performance forecast: expected 2016 attributable net profit of 130 million-160 million, 2015 loss of 190 million (asset impairment 440 million), year-on-year turnround to profit, corresponding to Q4 attributable net profit of 12.91 million-22.91 million, continued to grow significantly (15-year Q4 loss of 240 million). The profit has improved significantly compared with the same period last year, first, due to the upward trend of the real estate cycle in 2016, the prosperity of the pillar industries such as cement and real estate has obviously rebounded; second, the company's operation has improved and there is an inflection point.
The optimization of industrial structure opens up new growth, and the value of high-quality assets is highlighted.
The company has formed a "551" industrial system with real estate, cement and finance as its main business, while setting foot in coal, medicine, commerce and other fields. The company is one of the leading cement companies in Northeast China, and the future regional supply and demand pattern will be improved at the bottom, benefiting from obvious elasticity; while the real estate and coal business will mainly focus on stock contraction, which will contribute to the improvement of the company's financial structure; in recent years, the company has focused on cultivating and developing pharmaceutical business, launched in 2016, and continued to focus on the strategic accelerated layout of the large health industry. In addition, the company holds high-quality financial assets such as Northeast Securities and Jilin Bank (disclosed in the company's 16-year quarterly report), which has revaluation value.
The management actively participated in the fixed increase, and the local state-owned enterprises really changed the target.
The major shareholder of the company is Changchun SASAC (11.35%). In 2015, the management became the second largest shareholder through a three-year fixed increase (4.98%). In 2016, the management once again actively participated in the fixed increase (currently approved by the Securities Regulatory Commission. Jinta investment subscription of management shareholding platform is no more than 5%, lock-up period for three years), on the one hand, it shows confidence in the company's long-term development. On the one hand, the further promotion of the mixed reform of state-owned enterprises (after the completion of the fixed increase, the proportion of shares held by SASAC will be reduced to 9.08%), which will help to improve operational efficiency.
Investment advice: give a "buy" rating
The company is a large comprehensive state-owned enterprise (11.35%) controlled by Changchun SASAC, with many high-quality assets and low valuation. In 2015, the management became the second largest shareholder of the company through a three-year fixed increase, and major changes have taken place in the governance structure. The company is actively adjusting its industrial structure, focusing on developing large and healthy industries, and it is expected that the financial structure and business will continue to improve. It is estimated that the EPS from 2016 to 2018 will be 0.06,0.16,0.24 yuan respectively, with a "buy" rating.
Risk hint: the macro economy continues to decline, cement prices fall, and raw material prices rise sharply.