Main points of investment

Event: the company issued an annual performance forecast, and it is estimated that the company's net profit belonging to shareholders of listed companies in 2016 is 110 million yuan to 140 million yuan, an increase of 382% 514% over the same period last year. It is estimated that the basic earnings per share is about 0.37 yuan-0.48 yuan.

Comments:

The year-on-year performance increased significantly compared with the same period last year. According to the annual performance forecast issued by the company, it is estimated that the net profit of the company belonging to shareholders of listed companies in 2016 will be 110 million yuan to 140 million yuan, an increase of 382% and 514% over the same period last year. It is estimated that the basic earnings per share is about 0.37 yuan-0.48 yuan. The main reasons for the substantial increase in the company's performance are as follows: the company's associate Lhasa Shenghao Investment Co., Ltd. realized income from the transfer of its equity holding in Guangzhou Huangpu Chemical Co., Ltd. during the reporting period, and the company calculated its share according to the proportion of its shareholdings. at the same time, the company invested in the development of the "Mianshi" Xidi Bay project, which carried forward part of the profits in 2016, resulting in an increase in profits.

Stock incentives provide growth motivation and there is plenty of cash on paper. The company launched stock options and restricted stock incentive programs in February 2016, of which restricted stock was granted on June 17, 2016. In addition, the company has sufficient paper funds. According to three quarterly reports, by the end of the third quarter of 2016, the total investment amount of various securities held by the company reached 923 million yuan, book currency funds and transactional financial assets were 87 million yuan and 92 million yuan respectively, and the amount received in advance was 330 million yuan. Liquidity is sufficient. Investment advice: the company's full-year performance is expected to grow significantly, with sufficient cash on paper and no interest-bearing liabilities. It is estimated that the EPS from 2016 to 2018 will be 0.40,0.29,0.35 yuan respectively, and the corresponding PE will be 43.8,60.3 and 50 times respectively.

Risk hint: monetary policy tightens; sales performance falls short of expectations.